Working From Home - Claiming Costs

Working from home has become the latest craze borne out of necessity, with some (like me) doing it only when I absolutely have to and others relishing the opportunity to balance their work and home life out a little.

There are handily some tax breaks that come from working from home, from fairly limited and simple refunds of costs, to detailed calculations leading to greater tax savings.

At the beginning of the pandemic, the government announced that the weekly tax relief of £4 per week would increase to £6 per week for those who have to work from home as part of their job. This is a standard rate which can either be paid to employees tax free or used on employees’ (or directors’) tax returns as a cost to reduce the taxable income taken from their employment with the company.

This flat rate has the additional benefit of being available for the whole year even if working from home wasn’t continuous. An unusual blanket approach which will save a basic rate taxpayer £62 or someone in the additional rate band, a huge £140 in tax per year.

There is a detailed method to calculate the costs of working from home and guidance for this is shown on HMRC’s site - https://www.gov.uk/tax-relief-for-employees/working-at-home

Things like broadband, council tax and heating are all things that can be claimed – although it’s important to remember that this method, although more tax advantageous, is also open to scrutiny by HMRC. It’s a balance of attitude to risk versus claiming what’s due.

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