Working from an office in your home tax allowance
You may be able to secure tax deductions and tax reliefs if you are required to work from home.
Please note that you will not be able to claim tax back from working from home if you have a choice to work from home.
The rule of thumb is this:
– Did you choose to work from home
– – Yes: You will not get a tax refund because you work from home
– – No: You will be able to get a tax refund from working from home
What tax deductions can I claim for my home office?
You will be able to claim back the following items to get a tax deduction for the home office costs
– Business telephone calls: You may need to split out the personal element and business element of your calls
– Gas: A business proportion for the heating of your home to ensure you have a nice comfortable working environment
– Electricity: A business proportion usage of the electricity used for all your business machines and equipment whilst working
What tax deductions can I not claim?
There are many costs of running your home. However, there are many items that you will not be able to claim just because you work from home.
– Sky, Netflix, Virgin media television licence fees
– British Telecom, Virgin Media or other broadband services
– Landline costs of your telephone
– Council tax
– Mortgage interest of your home
– The capital element of your home mortgage repayments
– Food and drink consumed in your house
Can my employer pay me tax-free money for working from home?
As HMRC outlines that your employer can pay you £6 per week for working from home.
Do I need to keep records of my working from home tax deductions?
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If you want to know
How do I claim tax credit because I worked from home?
I am an employee and I was paid back the cost for using my home as an office
You will not be able to get a tax deduction if your employer has reimbursed you. Your employer will pay you back. The money you receive from your employer will not be subject to income tax by HMRC. Your employer will claim the expenses on their books and claim the relevant tax relief.
I am an employee and I was not paid back for the use of the home by my employer:
There are three ways that you can claim the tax relief fort he costs of working from home
– Your annual self-assessment tax return (if you submit one) or
– You will need to use the online government gateway to obtain the tax relief and money form the government due to working from home or
– You can complete an online form to claim a tax refund for working from home and post it to HMRC, whom will then send a payment to you.
I am an employee of my own limited company
You ought to have your own limited company pay you the above amounts for the use of home. These payments are will not attract an income tax charge. You limited company should make direct payments to suppliers for any equipment that you use for business in your home office. The costs will be an expense to the company and will claim the corporation tax reliefs.
Your limited company will be able to claim these costs as capital allowances as part of the Annual Investment Allowance (AIA).
I am self-employed or a buy to let property investor. Can I make a claim for my home office?
HMRC have said that you can only make claims because you are required to work. You cannot claim the tax relief because you choose to work from home. However, there are arguments against this suggestion:
– You are required to work from home because you are worried about going into a serviced office due to health risks with COVID19 and Coronavirus
– The expenses of gas and electricity are being incurred for the purposes of business. As such you have the right to make a claim.
As such these claims may be identified on your personal self assessment tax return.
Can I claim a tax credit for the equipment I have used whilst working from home?
You may need equipment to work from home. Such items may be:
– Desktop PC or laptop
You will be able to claim these costs as capital allowances as part of the Annual Investment Allowance (AIA).