These days it’s common to work from home at least some of the week. With busy schedules and a lot of places saying goodbye to the standard 9-5, there’s no wonder really. As well as this, lots of companies give their employees the opportunity to work remotely and are much more flexible with location arrangements. However, this leads to a lot of our clients wondering whether there’s any tax relief for those than work from home to cover the costs of doing so. It can be hard to get your head around the ins and outs of what you can and can’t claim. HMRC have a few rules and regulations around the costs that you can claim on and we’re going to talk you through them within this blog post. We’ll tell you about the costs that you’re able to claim on, whether your home would be classed as a workplace in order to claim and those costs that you can’t claim against.
According to legislation surrounding employees claiming on costs incurred when working from home, employees are only able to claim relief for expenses that are exclusively & necessarily incurred during the performance of their stated duties. Any costs that don’t increase directly from the act of working from home aren’t included in what you can claim against. To claim relief, employees need to be able to show evidence that their home is a workplace. In the eyes of HMRC, the home is only a workplace if it meets the following criteria:
- If the employee undertakes substantive duties when working from home. These are the tasks which employees must carry out which form the whole or part of their central duties outlined in their employment.
- These duties can only be completed with use of appropriate facilities and that these facilities aren’t available on the employer’s premises or anywhere else provided by the employer. There is however an exception here for employees that live far enough away that it could be classed as unreasonable for them to travel daily.
- There is no instance either before or after the employment contract is written that the employee given the opportunity to make the choice as to whether they work at home or at the employer’s premises. Working from home must be the only option in order to make claims.
If an employee is able to show that their home qualifies as a workplace then they can claim tax relief for the following expenses:
- The unit costs of telephone calls that are made solely for business purposes
- Metered costs of water that is used in the performance of work duties
- Any additional costs (unit) of gas and electricity which is used whilst a room is occupied for work only.
Costs that employees cannot claim against are:
- Rent / Mortgage payments
- Council Tax
This is because these will not increase due to working from home. Sometimes it isn’t practical to calculate extra costs. You can make these claims online, by calling HMRC, by post or through your self-assessment tax return if you’re registered.
If you need a little more guidance on claiming expenses, self-assessment or anything else at all then get in touch with the ABC team today!
Call us on 01427 613613
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