The tax rules for employed for claiming working from home expenses are different. Though you can claim for gas, electricity and water expenses, it would not be in the same way as a self employed person. Your bills, insurance and mortgage repayments are seen to be fixed anyway as they are your usual household bills regardless of whether you work from home or not. You can therefore only claim for the extra energy that you have used and not a percentage of the overall costs. You cannot claim relief for the cost of your telephone line rental or internet access as you would have them for personal use anyway. You can however, ask for a deduction for the cost of the calls made on behalf of the business. A reasonable and acceptable amount to ask for would be about £3 per week plus the cost of business calls on top. If you did want to claim more than this then you will be asked to prove that your household bills have increased (by the figure you have asked for) due your work. You can potentially claim these expenses dating back several years depending on what you have stated on previous (if any) Self Assessment Tax Returns.
The HMRC tends to like these expenses to be paid by the employer as opposed to them, as it is a mutual agreement between yourself and your employer that you work from home. If however your employer refuses to pay then there are other certain criteria that must be met, and if any of these requirements are not met then no relief at all will be given.
- First and foremost that you must show that you have no alternative choice but to work from home. As stated in the HMRC Tax Bulletin Number 79,
“there is an objective requirement that those duties should be carried out at the employee’s home and nowhere else.”
- There is a very fine line with this rule and if the employee has even the slightest choice, they will not be given any form of relief. For example it is acceptable if your employer’s premises are too far away for you to be reasonably expected to travel there on a daily basis providing that you did not have a choice in this, i.e. by moving further afield, excepting a job too far away or turning down an offer to relocate you.
- The work you carry out from home must be “all or part of the central duties of employment”.
- You require certain hardware/software or other facilities that are not available at your employer’s premises.
So to summarise, tax deductable expenses for working from home can be claimed providing that they are realistic, that you meet certain strict criteria and that your employer does not already pay you for these additional costs you incur due to your job. Please ask a trained accountant if you require additional information or clarification as to what you can claim.
Written by Becky Drummer-Jones