Working from home - claiming tax relief??

[GinG]

Hi All,

I was speaking with a friend earlier and he says he is almost certain because I work from home 100% of the time (Sales Manager for the UK working for an Irish firm) I can claim tax on costs.

My google skills are weak and come up against conflicting results so was wondering if people on here have done this? Can you claim on things like Mortgage, Electric & Gas, Insurances, Internet etc?

I believe it is based on the size of the bedroom, I currently work in the box bedroom inn a 4 bed house...would I be better moving into a bigger room to claim more %??

If people could point me in the right direction it would be greatly appreciated.

 

[booyaka]

You can claim a percentage of your costs for your home that relate to your business.

I agree, there is very little clear guidelines as to what you can claim/how much etc

I also work self employed from home 100% of the time and in the end, found a friendly accountant who for £300 a year will do it all for me.

Tax return is the easy part to deal with - what you claim seems to be very difficult to get a straight answer. HMRC website is useless in terms of what you are allowed/not allowed/how much etc

 

[andicole0]

If you work from home you will also need to inform your home insurer and the local council to ensure you're compliant with their requirements.
Andi.

 

[Adam]

How can you be a sales manager and work from home 100% of your time? Surely your job is to get in front of clients and motivate your team to sell more. You can't do this 100% of the time from the phone.

 

[Freakbro]

If you work from home you will also need to inform your home insurer and the local council to ensure you're compliant with their requirements.
Andi.

Not if it's just an admin/clerical job

To the OP, there are two ways of doing it. The 'proper' way is to take the % of occupancy of the house you use for business ie ; the number of rooms you use / total number of rooms (not inc Kitchen & bathroom) and use that % against your House expenses - Utilities, Insurance, C.Tax, Mortgage Interest (not capital)

Or the quick and easy way is you just claim a few hundred pounds as a flat rate (Say £300) and put that down as the figure - as long as it's within the realms of the first way the tax man is not going to care.

 

[estebanrey]

If you get tax relief, shouldn't everybody who has to move house because of their job too?

 

[GinG]

To confirm I am employed and not self employed.

95% of the work is done remotely, emails, skype etc so most of my time is within the office. Yes I will need to go visit the customers but it may work out 2 - 3 days per month.

Anyway the title is just for titles sake, one for the business card. Basically I am setting up the UK side and all supply is coming from the facility over in Ireland.

Insurances know about working from home...wasn't aware I needed to tell the council?

 

[GinG]

Not if it's just an admin/clerical job

To the OP, there are two ways of doing it. The 'proper' way is to take the % of occupancy of the house you use for business ie ; the number of rooms you use / total number of rooms (not inc Kitchen & bathroom) and use that % against your House expenses - Utilities, Insurance, C.Tax, Mortgage Interest (not capital)

Or the quick and easy way is you just claim a few hundred pounds as a flat rate (Say £300) and put that down as the figure - as long as it's within the realms of the first way the tax man is not going to care.

Thanks for this, I am employed rather than self employed does this change things?

How do I go about doing this, do I call up the HM Revenues and discuss?

In essence would I be giving myself a £300 pay rise per month??

 

[Freakbro]

The £300 example would be the expense claim for the year

My example was based around being Self employed. For employees - and this is from the HMRC website

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

8. Working at home

You may be able to get tax back for some of the bills you have to pay because you have to work at home on a regular basis.

You can only claim for things to do with your work, eg business telephone calls or the extra cost of gas and electricity for your work area.

You can’t claim for things that you use for both private and business use, eg rent or broadband access.

You don’t need to provide records for claims of up to £4 per week (£18 per month). For claims over £4 per week you’ll need to provide evidence of what you’ve spent.
If you work at home voluntarily

If you’ve agreed with your employer to work at home voluntarily - under a ‘homeworking arrangement’ - they may still contribute towards your expenses but don’t have to.

If your employer contributes up to £4 per week (£18 per month) towards your expenses, you won’t need to provide receipts.

If your employer contributes more than £4 per week you will need to be able to show what you’ve spent to get tax relief.

You won’t have to pay tax or National Insurance contributions on the amount you get from your employer.

If you work at home voluntarily and your employer doesn’t contribute to your expenses, you can’t claim tax relief for what you’ve spent.

https://www.gov.uk/tax-relief-for-employees/how-to-claim

2. How to claim

The way you claim tax relief on expenses depends on the amount you are claiming for.
Claims up to £2,500

You must claim using a Self Assessment tax return if you already fill one in.

If you don’t already fill in a Self Assessment tax return, and your allowable expenses are under £2,500 for the tax year, fill in form P87 and send it to the address on the form.

If you’ve made a successful claim in a previous tax year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions), you may be able to make your claim by phone.
Claims over £2,500

You must claim using a Self Assessment tax return.

 

[lude1962]

As you want to claim back from hmrc for household costs etc, ie you have reserved a room for business use, therefore you have to pay business rates to the council for that room.

 

[GinG]

Thanks for that, will look into it!

 

[Freakbro]

As you want to claim back from hmrc for household costs etc, ie you have reserved a room for business use, therefore you have to pay business rates to the council for that room.

Not if it's just Clerical

6. Working at home

You don’t usually have to pay business rates for home-based businesses if you:

use a small part of your home for your business, eg you use a bedroom as an office
sell goods by post

 

[jackboy]

It's much harder to claim anything if you are employed, very easy for self-employed.

As others have said 'formally' working from home has other issues, for example it could impact the 100% exemption of your houses capital gain.......unlikely but could.

 

[dowie]

it could affect lots of things - though tis quite simple to find out where you stand, you go and have a chat with a qualified accountant who specialises in this area

 

[Greebo]

It's much harder to claim anything if you are employed, very easy for self-employed.

As others have said 'formally' working from home has other issues, for example it could impact the 100% exemption of your houses capital gain.......unlikely but could.

|Not true. Accountants used to warn about this but HMRC clarified it in June 2008 that this is not the case, and mortgage interest can be offset against your tax bill where relevant.

 

[Greebo]

it could affect lots of things - though tis quite simple to find out where you stand, you go and have a chat with a qualified accountant who specialises in this area

Pretty much accepted nowadays even by mortgage companies. The only real issue is informing your insurance (they still knock back claims if they discover you are working from home and don't tell them)

 

[booyaka]

ie you have reserved a room for business use, therefore you have to pay business rates to the council for that room.

If you work from home you will also need to inform your home insurer and the local council to ensure you're compliant with their requirements.
Andi.

utter nonsense......Honestly.

Unless your cooking food in your house and selling it to the public or offering up drink to the public- why would the council give a toss about what you do in your own home???

At a push your home insurance my require tweaking if you have clients visiting you in your home etc - but for clerical work/working from home/phone calls etc etc - you don't need to tell anyone.

Well worth finding an accountant who would deal with all the options for you.

 

[Greebo]

utter nonsense......Honestly.

Unless your cooking food in your house and selling it to the public or offering up drink to the public- why would the council give a toss about what you do in your own home???

At a push your home insurance my require tweaking if you have clients visiting you in your home etc - but for clerical work/working from home/phone calls etc etc - you don't need to tell anyone.

Well worth finding an accountant who would deal with all the options for you.

To be fair, the HMRC prefer you to allocate a room SOLELY to home working and technically it can be argued by your local council that you should pay business rates on this room as its solely used for business but conversely if its a multi used room the council excludes that but the Revenue hates it and disallows things but who in the right mind would tell the council that's what you are doing?

Insurance is a must though as any excuse not to pay out claims if you have printer, computer etc for business use although unlikely there would be any extra charge and its just a notification.

Accountant isnt needed. Likely to charge you a good few years of any benefit you are claiming.

 

[Jim99]

The quote that Freakbro found seems to be the most applicable here to me:

If you work at home voluntarily and your employer doesn’t contribute to your expenses, you can’t claim tax relief for what you’ve spent.

 

[LOAM]

As you want to claim back from hmrc for household costs etc, ie you have reserved a room for business use, therefore you have to pay business rates to the council for that room.

Do not do this, you could become liable for capital gains tax if you sold the property. We started our practice from here and worked full time but not from any specific room. Our accountant simply stated we worked around the house wherever. We did this for about 18 months and I ran about 10% of the household costs as expenses under advice from the accountant.