Author: Meg Dimmick
You may be eligible to claim tax relief for additional household costs if you have to work from home on a regular basis, either for all or part of the week. This includes having to work from home because of COVID19.
You cannot claim tax relief if you choose to work from home or if your employer has reimbursed you for these expenses. You also cannot claim tax relief in your personal capacity if you have already claimed work form home expenditure through your limited company.
Tax relief could be claimed on the following expenditure:
- Gas and electricity charges
- Metered water
- Business phone calls including dial-up internet access.
You cannot claim for the entire bill, the claim can only be in relation to the business part of the expense.
You may also be able to claim tax relief on equipment you have bought such as a laptop, chair or mobile phone.
How much can you claim?
You can either claim tax relief on:
- £6 a week from 06 April 2020 (prior year rate is £4 a week) and you will not need to keep evidence of your extra costs, or
- The exact amount of extra costs you’ve incurred above the weekly amount BUT you will need to keep evidence such as receipts, bills or contract for this extra expenditure. This amount is worked out as a percentage of the expenses incurred based on the amount of space occupied in the house for business/work purposes.
It is however important to note, that if opting for claiming the exact amount spent, is that this could have capital gains consequences when selling a property in the future. Per HMRC, if you have used part of your home exclusively for business purposes – for example you have a fully equipped home office room within your home, on selling the property this may create capital gains consequences.
However, using a room as a temporary or occasional office does not count as exclusive business use. For further information or a consult around whether or not this ruling will apply to you, please do contact our offices on details provided below.
Your tax relief will be based on the rate at which you pay tax.
How you can claim:
Claiming this relief will either be through your self-assessment (if the expense has not already been claimed through your limited company), or through HMRC’s website (a government gateway ID and password would need to be created) check out this link to see if you qualify: https://www.gov.uk/tax-relief-for-employees
For further information or calculations as to what relief you would receive, please contact our offices by email at info@sailsolutions.co.uk or via telephone on 0203 773 6760