When it comes to working arrangements during the current Coronavirus lockdown, you have two options – continue working from home if you are able or return to the workplace if you cannot work from home and it is safe to do so.

Consequently those who can work from home are in for a longer period of home-working and so some questions may be asked surrounding tax relief.

The rules for working at home allow you to claim tax relief for the additional costs incurred as a result for working at home. Let’s have a look at what they may be:

  1. Electricity – certainly as you will have your computer on, may have a light on and then boil a kettle a few times per day. If you are working an 8 hour day you may use a couple of kwh and based on a 5 day working week that is about £1.50 to £2.00 a week.
  2. Heating – thankfully the weather is warming up and so maybe the heating is not on. Even if it was, would it be on anyway if you also have others in the house and say children at home?
  3. Internet usage – This is dual purpose as you would have internet usage in any case and consequently there is no additional cost for working at home.
  4. Mobile phone – Most price plans now have unlimited minutes included and therefore there is no additional cost for using your mobile to make a few business calls.

The thought process above is the same whether you are self-employed or employed with the only extra criteria for the employed being that it must be necessary for you to work at home. I think given the current pandemic, that box is firmly ticked.

How much can I claim?

HMRC increased the working at home allowance to £6 per week in April from £4 previously. As shown above, the actual cost of working at home may be quite low and consequently calculating the cost is probably not worth it when you can claim £6 per week as an allowance.

How is it paid?

If this is paid by an employer then it is provided free of tax and you should make enquiries to your HR dept.

If it is not then a claim can be made to HMRC via Online P87 Form to obtain a saving of either 40% or 20% tax depending on the personal circumstances. The claim should be on the individual’s self-assessment return or where no tax return is prepared, online via their government gateway account

You claim retrospectively on expenses incurred. So if you’re only working at home due to Coronavirus, it’s best to wait until you’re back at work then make the whole claim at once. Your tax code will likely be adjusted so you pay less tax over the year.

If you require any further assistance regarding this subject, please do get in touch.

The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.

Lambert Chapman Chartered Accountants

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