Tax relief while working from home

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As more and more of the UK public work from home it is worth noting that employees can claim tax relief for the bills, such as heating, they have to pay.

This however only refers to staff doing so at their employers request, and does not apply to those choosing to work from home.

An employer can pay workers up to £4 a week (£18 a month) to cover additional costs if they have to work from home, and these workers will not need to keep any records.

The self-employed meanwhile can calculate allowable expenses using a flat rate based on the hours they work from home each month, meaning one won’t have to work out the proportion of personal and business use for the home.

Simplified expenses can only be used by those working for 25 hours or more a month from home.

Hours of business use per month Flat rate per month
25 to 50 £10
51 to 100 £18
101 and more £26

 

The flat rate doesn’t include telephone or internet expenses. These can be claimed by working out the actual costs.

If claiming expenses like heating, electricity, internet and phone use via the actual costs, the Government says that one must find a reasonable method of dividing costs, such as by the number of rooms you use for business or the amount of time you spend working from home.

The Government gives the following example:

You have 4 rooms in your home, one of which you use only as an office.

Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).

If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7).