Required to have home office

AnxiousMum

I don't think this is allowable here, but thought I would check as you all seem so knowledgable! Only reason I ask, is that when we had to have a home office back in Canada, there were certain tax deductions we could make.

If your head office is located at the other end of the country to where you work, and you are required to have an office space at home, storage facilities, have to have use of a landline, internet (for logging onto the system server at head office) - is there any kind of a tax deduction you can make for this?

At home we could claim a percentage of our mortgage interest or rent, electricity, telephone, heating, broadband connection - anything that was required by head office to carry out your employment from home.

PlutoinCapricorn

Over here, the main determining factor is whether or not you are self-employed: are you an employee who is taxed under the Pay As You Earn system?

If the latter, you can claim small amounts if your employer asks you to work from home occasionally and this makes you out of pocket. Some people claim a flat rate of £5 per week.

AnxiousMum

Thanks PlutoinCapricorn. I am on PAYE, not self employed. It's not 'occasional' though, but on a permanent basis. Does that qualify do you know?

PlutoinCapricorn

Being on PAYE gives you much less scope that you would have as a self-employed person.

Bear in mind that some of the costs are fixed and you would need to pay them anyway e.g. mortgage interest, council tax, but you would certainly use more water, heating and telephone line. But you save on travelling!

As an employee on PAYE, the employer could give you any extra money to cover some costs, are you sure that your salary is not intended to take this into account?

HMRC www.hmrc.gov.uk/guidance/cwg2.pdf covers this subject from the employer's viewpoint on page 91, and they are the final authority. Your employer can pay you up to £3 per week to cover extra costs. In your position, I would ask the employer first, before deciding to fill in your own tax return and claiming repayment of tax. Does anyone else work at home for this company? What do they do?

fengirl_2

The short answer to your question is that if your sontract of employment demands that you work from home, there is a basic allowance of £3 per week which you can claim against tax. You simply write to your tax office to claim this and they will include it in your code number.

If you can show that it actually costs you more than £3 pw to keep an office at home, then you can claim the additional costs at the end of the tax year. These costs would chiefly be utilities - any costs which are additional because you are home based.

AnxiousMum

Thank you both Pluto and Fern. The company has several sales reps - some who are office based and work in Head Office. There is one sales manager who is half office based and half home based, and four reps who for obvious reasons due to location from head office, are purely home based with about three visits overnight to head office each year.

PlutoinCapricorn

I have seen many cases where an employee on PAYE elects to work from home one day or two here and there - to finish a report for example, or because of an expected delivery. I have also seen the employer ask everyone to work at home for one or two days - because of a train strike or major office reorganisation. These are all exceptional.

If you are required to work at home all the time (as opposed to requesting this), which I have not come across before, there are issues other than extra costs: health & safety for example, and management and appraisals. Your employer should have policies about all these things.

It is not easy to calculate not to mention prove the exact amount that you will be out of pocket, hence the £3 per week allowance.

seadee

If you are required to have a landline and internet access then, in my experience, the company work for should pay for the means for you to achieve this, ie installation of line and rental. They should also pay for any computer equipment.
Your work place at home needs to be inspected by an appointed person from your work to ensure that all equipment is electrically safe (PAT) and the place you are using is DSE compliant.

AnxiousMum

Re the landline and internet access - well, my position on that is that I have had those for years and years, so not really an expense of employment - my cost. The main thing would be electricity and heating, and having to allow enough space in the home (hence having to have a house of a particular size) to allow a suitable office space. If I was out at work each day, I'd have no electric or heat on during the day until everybody returned home.

In terms of computer equipment - they supply the laptop, which is inspected on an annual basis, as well as the printer. They also supply stationery, or I can purchase and expense it as required. Telephone calls - they provide a mobile on contract which they pay for business use, and provide a prefix for phone calls from home (about 40 per day) that gets billed to them.

As mentioned, the main extra cost for me is the 'office' itself (had to rent a four bedroom house instead of a three bedroom which would've been big enough for my family's personal use), and the extra heating and electricity during the day time hours.

In terms of whether it is a choice or not - due to distance from the home offices (based in SE, Manchester, Northern Ireland and York) from head office - it would be impossible for us to commute to head office each day for work.

Thanks for the link - though it really does apply more to if you are an employer and what forms you need to provide on an annual basis.

seadee

They still need to ensure that the office you use complies with current DSE regulations and so it should be inspected.
http://www.hse.gov.uk/msd/dse/

If internet access is a condition of your employment then your employer should be making some contribution to your ISP costs.

AnxiousMum

They do all that Seadee - the manager gets out about once a month for one to one appraisals and info/training sessions. Electrical equipment is PAT tested annually.
Like I said for the internet - I have had internet access since about 1992 - and would have it anyways whether required for work or not, so don't see that as a work expense. Same with my telephone line - have always had one - so not an additional expense for work.

The extra heating and electricity used however, are an additional expense - and I am simply asking if there was a set rate that can be claimed, either in £ value or a percentage.