The way we work has changed and for many working from home has become the norm.
If you are self employed – then you will already be including in your accounts a charge for the additional costs incurred from working from home. There are 2 ways you can calculate this charge – one is a simple flat rate method based on the hours you work from home, and the second is a more complicated calculation, based on allocating a percentage of the actual running costs of your home to your business. Both methods are outlined in detail in my previous blogs.
Whichever method you use, the hours you work from home have probably increased significantly over the last 6 months, so you should ensure that this is reflected in the amount that you charge your business. It may be that the second method would now give you a higher figure – you need to do the sums!
If you are an employee, and have been working from home since lockdown, there is also a small amount that you can claim.
Your employer can pay you the grand sum of £6 per week to cover the additional costs you are incurring from having to work at home. If you don’t like to ask, or your employer is not able to pay you this, then you can instead claim tax relief on the £6 per week via HMRC. Not a fortune, but a gain of £1.20 per week for a basic rate taxpayer, and £2.40 a week for a higher rate tax payer.
How to claim as an Employee?
Either claim on your tax return if you complete one, but if you don’t then you need to simply file a P87 form. This can be done online if you have a government gateway set up – or by good old fashioned post otherwise. The section to complete is the “using your home as an office” section. Once submitted, your tax code will be amended to give you the tax relief on your claim.
If you have had to buy other office equipment to use at home during lockdown, and your employer is paying you back for this, this would normally be taxed on you as a benefit in kind. However, for this tax year, there is a relaxation of this rule! With many more hours being spent in your home office, it is important to have the right equipment to enable you to work from home – a proper desk and office chair etc, to save aches and pains in the future!
If you would like any more information, then please do contact Rosie Forsyth at Wilkins & Co.