Using your home as an office and tax
In the past, claims against tax for the costs of using you home as an office and for office furniture and other equipment has been difficult to obtain. Your employer would need to dictate that you must work from home.
With the advent of lock-down and working from home now mandatory for a large proportion of the working population, HMRC are being inundated with claims.
Employees that are covering their own home working costs
1. Consumable items, printer cartridges for example, can be claimed as an expense.
2. If you buy equipment to enable home working such as a desk, a chair, shelving, computers etc., then as long as the purchase was required to facilitate home-working, you should be able to obtain tax relief for the full cost by claiming a capital allowance.
3. You can also claim £6 a week from 6 April 2020 (£4 per week 2019-20) to offset additional electricity costs or other costs you have had to pay as a direct result of working from home and using your home as an office.
All of the above claims will be reduced if your employer makes a full or partial contribution towards these costs.
If you work from home for 25 hours or more a month you can claim simplified expenses and instead receive a fixed amount per month of between £10 and £26 see here.
Employers that are covering employees’ home working costs
Employers that provide equipment, services and supplies to any employee who works from home do not have to report or pay any tax or NIC if the items provided are only used for business purposes or any private use is insignificant.
Historically, employers that cover the cost of additional household expenses for an employee who works from home, did not have to report these or pay anything if both the following apply:-
- Employees need to work from home either because equipment they need is not available at your workplace, or their work means they have to live too far away from your workplace to travel there every day or
- The amount you give them is not more than their additional household expenses.
It is assumed that the first of these two conditions is now fulfilled by the needs of the COVID-19 lock-down.
About Karen Jones
Having worked for one of the world’s largest accountancy firms, Karen Jones uses her tax knowledge and skills to help clients obtain substantial reductions to their tax liabilities.
With an expanding portfolio of tax clients, Karen enjoys the variety her work brings her and particularly likes working with new businesses and people. With a growing number of tax clients, she frequently faces a variety of challenges and relishes the experience she gains as she solves them.
Karen likes the THP ethos: “I like the way the team has a professional, but friendly and down-to-earth approach – it creates a productive atmosphere that benefits everyone.”
Karen’s specialist skills:
- Personal Taxation
- Tax Efficient Planning
- Trust Administration