Home office expenses during lockdown – what you can claim
As a freelancer, my home office expenses during lockdown have been pretty much the same as they were before. However, because my wife now has to work full time at home and both of my children have been home learning since March, my utility bills have shot up.
It’s not surprising. On an average working day, we’re powering four computers between us. The kettle always seems to be boiling and the washing machine is getting a lot of action. Then, when the children have leisure time, they’re eating their way through more electricity as they play on their games consoles or watch Netflix.
Little wonder that I decided to switch my utility provider yesterday. In theory, I’ll save about £70 a year, but I think a lot of that is dependent on how quickly the lockdown lasts.
Home office expenses for employees
Because I’m self-employed, I can claim for my home office expenses via my normal self-assessment tax return. But what happens if you are an employee who now has to work at home?
According to the Daily Mirror, employees estimate that working from home costs them an extra £70 per month during lockdown. Even though that is likely to be a significant overestimate, most employees will be forking out a bit more to work remotely.
Luckily, HMRC will consider claims for home office expenses from people who currently required to work from home because of lockdown measures.
So how do you make a claim?
Claiming home office expenses
According to Moneysavingexpert.com’s Martin Lewis, there are two main ways to claw back home office expenses.
- Your employer can pay you an extra £6 per week, tax-free; OR
- You can claim tax relief on £6 per week, which will be deducted from your taxable income.
If you believe your office costs are higher than this, then you can still claim them from HMRC. However, you will need to provide detailed evidence of the cost increases. For the flat rate of £6, you do not need to keep any records – making it a lot less hassle to claim.
The simplest way to claim back home office expenses is to do it online, using your Government Gateway account. If you prefer to print out a form and post it to HMRC, then you can download one here.
Have you had to buy office equipment?
Quite a lot of people have had to buy office equipment to enable them to work from home. If your employer is paying you back for essential equipment, you’d normally have to pay tax and national insurance on this ‘benefit in kind’. However, for this tax year (i.e. until 5th April 2021), you won’t have to pay either tax or NI on these items. As Martin Lewis suggests, if your employer does make deductions, then you should point them to this legislation, which states:
This instrument provides for a new temporary exemption to ensure that employees who have been encouraged to work from home as a result of the coronavirus outbreak, and subsequently obtain home office equipment which is reimbursed by their employer, will not be liable to a tax charge.
Other ways to keep home office costs down
I’ve already mentioned that switching your energy provider can help you save costs for your home office. If you haven’t run comparison checks on utility companies for more than a year, then now is a good time to do so. In a similar vein, if your broadband contract has expired (or is about to), there are some good deals out there. If you don’t look, you won’t get the better deals!
If you are a THP client and you’d like any advice on either claiming expenses or reimbursing your employees, please get in touch. We’d be delighted to help you. You might also be interested in our blog, Pros and cons of working from home – which is very topical right now!
About Ben Locker
Ben Locker is a copywriter who specialises in business-to-business marketing, writing about everything from software and accountancy to construction and power tools. He co-founded the Professional Copywriters’ Network, the UK’s association for commercial writers, and is named in Direct Marketing Association research as ‘one of the copywriters who copywriters rate’.