You probably never thought you would ever complete a working day in your dressing gown, but for workers of 2020, that has soon become a reality. The COVID-19 outbreak has caused offices to close and professionals to work from the comfort – and sometimes distractions – of home, which is why some people are in need of key working from home tax allowance tips.
When working from home your household bills may increase, especially if your partner is also home during the day and working. But did you know that working from home entitles you to some tax relief? There are things you can claim if you work from home and your employer is not reimbursing you the costs.
Claiming work from home expenses doesn’t need to be confusing. Learn more about remote working tax relief here with some key working from home tax allowance tips!
Can I Claim Tax Relief for Working from Home?
There is tax relief available for people working from home. However, to qualify for the tax relief, you must be made to work from home. If you can choose between working at the office or at home, and you choose to stay home, then you will not qualify for the available tax relief.
During the COVID-19 outbreak, it is likely that you are forced to work from home because your office or place of work is closed due to social distancing/lockdown measures. Therefore, you have not chosen to work from home with alternative options – and you would be eligible for tax relief; if you still don’t know if you are eligible, then you can check the gov website to learn more.
So, What Can I Claim Tax Relief On?
You can claim tax relief on expenses that relate to your work but are not used for personal reasons. For example, you may need to top up your smartphone to make business calls. All of the money you add to your smartphone balance that is used to make professional calls will be eligible for tax relief. The money used to make personal calls is not eligible for relief.
Another example would be heating costs. Your whole heating bill is not eligible for tax relief, but the proportion of heating used to heat your workspace during the hours you work will be eligible for tax relief. Some things cannot be claimed against if you use them for personal and business purposes, such as rent.
It is always best to speak with a qualified UK accountant to understand what you can and cannot claim, as well as how to calculate your remote working expenses.
Claiming Expenses from Your Employer
If you work from home, you can ask your employer to pay you a weekly sum to cover at-home costs. This was £4 per week, but since April 2020, this has been increased by 50% to £6 per week. If you are claiming monthly working from home costs, this figure is set at £26 per month.
If you claim this money from your employer, you are not required to keep records of your time working from home.
This scheme brings parity to a scheme devised for self-employed people running their own business from home. The self-employed can claim a certain amount of money each month, known as simplified expenses. The amount they can claim depends on the number of hours worked each calendar month, but most working full-time will be claiming £26 expenses each month as well.
Buying Small Items to Work from Home
The same applies when buying items to do your work from home. If you need an item to do your job and it is wholly and exclusively for professional purchases, you may be able to claim tax relief on the purchase.
This means claiming the rate of tax you pay (20% or 40%) back from the purchase. Note, the item you bought must be for work only and not already paid for by your employer.
Buying Significant Items to Work from Home
You may have needed to buy significant equipment to work from home. In most instances, employers may supply computers or laptops to carry out their remote working responsibilities, but if they did not and you bought these yourself for the sole purpose of your work, you can claim the cost back as a capital allowance.
This means you claim the full amount of the purchase back, rather than claiming tax relief on the purchase. For example, if you bought a laptop for work purposes only and it cost you £400, you could claim £400 back – not 20% or 40% of the amount.
What About Our Key Workers?
Key workers are still on the front line. These UK heroes may be eligible for tax relief, especially nurses and healthcare workers.
If you are an NHS nurse and are not aware of your agreed uniform laundry allowance, read our detailed guide on the subject here.
Working From Home Tax Allowance – Get Clear Cut Answers!
What you can and cannot claim can be a bit of a minefield without the expertise as an accountant in Hull & Yorkshire and understanding of UK tax laws.
To get straight answers on what you can or cannot claim now that you are working from home, do not hesitate to contact our knowledgeable team at Yorkshire Accountancy!