Work from home is the new black when talking about work culture. Technology has already been influencing how we work and the Corona outbreak served as a catalyst to trigger the growth of work from home culture. Work from home has saved businesses from perishing during the ongoing crisis.
While most of us are practising social distancing and working from home, there’s some good news!
Employees working from home can claim tax deductions for some of the bills that have to be paid because you are working from home on a regular basis and using your home as an office. However, employees can’t claim tax relief if they have voluntarily chosen to work from home. And, you should claim within 4 years of the end of the tax year that you are claiming for.
However, this isn’t anything new as employees in the UK could claim these benefits earlier also. But from 6 April, employees can claim up to £6 a week which is up from £4 a week in the 2019/20 tax year.
Here’s a breakdown of the expenses that you can claim for and include as work-related expenses.
When can you claim a deduction
In order to claim a deduction for expenses while working from home, the following conditions must hold true:
- You should have spent your own money on
- The expense should be directly related to things that you must buy for your job
- You should have a record to prove it.
You can’t claim for the expenses that have already been reimbursed by your employer.
What expenses can you claim
While working from home, you can claim a deduction for the additional expenses you incur. These include:
- Electricity expenses associated with heating, cooling and lighting the work area
- Cleaning costs for your dedicated work area in your home
- Phone and internet expenses (the flat rate doesn’t include telephone or internet expenses)
- Computer consumables (for example, printer paper and ink) and stationery
- Home office equipment, including computers, printers, phones, furniture and furnishings
However, it is to be noted that you can’t claim for things that you use for both personal as well as professional use like the internet connection or your rent.
How to claim for job expenses
There are three ways you can claim your business expenses incurred while you work from home office:
- Through your employer as a non-taxable benefit: You can do this via your usual expense claim, meaning which cash will be paid straight to your bank account and without tax being deducted.
- Through HMRC and the usual self-assessment: You can claim tax relief on the up to £6 a week cost. Amid the COVID-19, the HMRC will consider claims from employees working at home due to coronavirus measures if their workplace is closed. If expenses are not reimbursed, tax relief may be claimed directly from HMRC. You can claim this via the self-assessment form.
- For others: means you’ll have to fill out the online P87 form through your Government Gateway account or by filling out a postal P87 form.
The UK Government has been proactive while responding to the COVID-19 and even employees working from home can claim for work related expenses. This is both encouraging employees to practice social distancing as well as financially supporting them during the tough times.