Working at Home – How can claim tax relief? Reply


Working from Home Tax Relief

Tax Savings for Employees and business covering VAT, Home Costs and Equipment

Further information on the items discussed in the video

VAT Notice 700 – 32. Apportionment of tax between business and non-business activities

This section explains how to treat tax incurred on goods or services that are used only partly for business purposes

https://www.gov.uk/guidance/vat-guide-notice-700#apportionment-of-tax-between-business-and-non-business-activities

 

Claim tax relief for your job expenses

From 6 April 2020 your employer can pay you up to £6 a week (£26 a month) to cover your additional costs if you have to work from home. For previous tax years the rate is £4 a week (£18 a month).

You will not need to keep any records.

If you work at home voluntarily

If you’ve agreed with your employer to work at home voluntarily, or you choose to work at home, you cannot claim tax relief on the bills you have to pay.

 

https://www.gov.uk/tax-relief-for-employees/working-at-home

 

Simplified expenses if you’re self-employed

 

You can only use simplified expenses if you work for 25 hours or more a month from home.

Hours of business use per month Flat rate per month
25 to 50 £10
51 to 100 £18
101 and more £26

Example

You worked 40 hours from home for 10 months, but worked 60 hours during 2 particular months:

10 months x £10 = £100
2 months x £18 = £36

Total you can claim = £136

https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

Specific deductions: use of home: apportioning the expenditure

The factors to be taken into account when apportioning an expense include:

  • Area: what proportion in terms of area of the home is used for trade purposes?
  • Usage: how much is consumed? This is appropriate where there is a metered or measurable supply such as electricity, gas or water.
  • Time: how long is it used for trade purposes, as compared to any other use?

The method of apportioning an expense depends on the relative importance of each of these factors. There are examples at BIM47825.

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47815

 

Claim capital allowances

 

You can claim capital allowances when you buy assets that you keep to use in your business, for example:

  • equipment
  • machinery

https://www.gov.uk/capital-allowances

Other Points to Consider

  • Capital Gains Tax
  • Planning Consent
  • Insurance
  • Business Rates
  • Benefit in Kind

 

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