MENU

The tax benefits of working from home

Home working is on the rise.

The number of people working from home has soared over the past few years. In fact, according to the Office for National Statistics (ONS), the number of people working from home is at its highest level since its records began, with over four
million people now using their home as an office.

The attractions of working from home are well documented: reduction in daily
commute and mileage; more flexible working hours to fit in with home life and a more relaxed working environment, to name but a few.

If you’re one of a growing band of home workers, make sure you know which allowances and expenses you can claim from HMRC for the costs incurred of using your home.

Here’s our quick guide to what you can claim in tax relief when working from home.

What you can claim when working from home

Although the majority of people who work from home are self-employed (63% according to the ONS), there has also been an increase of employees working for companies, who consider their home to be their main base for work.

With the advances in modern technology and the growing realisation from companies of the benefits of remote
working on an employee’s morale and wellbeing, companies are warming up to the idea of allowing their teams to work at home, at least part of the time.

There are differences in what you can claim in tax relief, depending on whether you’re self-employed or an employee of a company.

For the self-employed:

– You can claim all the costs that are incurred for business purposes

– You may also claim allowable costs – a proportion of all the other costs of running your home, such as light and heat, insurance, council tax, repairs, cleaning and mortgage interest.

Flat rates

If you don’t want to work out in detail all of your actual costs, you can use flat rates set out by HMRC. These are
business costs already agreed by HMRC to be used for costs associated with working from home and vehicle
expenditure, for specific occupations.

For employees:

An employee who is required to work from home to perform their duties may be able to claim the additional costs of home working from their employer, at their discretion. If not, a deduction of the costs may be claimed on their
personal tax return.

According to HMRC’s guidelines, employees can claim up to £4 a week tax relief without the need for a receipt or
evidence of expenditure.

Next steps

Whether you’re new to working from home or already well established, as expert tax advisers, we’ll look at your situation and make sure you’re claiming what you’re entitled to.  Get in touch with us to find out more.

For more tax tips and news, take a look at our previous blogs.