Another working from home question please

Eliza_2

Morning

I have two paye jobs where I am required to work at home as a condition of the job. I also have my own business (sole trader) and work at home on the admin etc for that although the business premises are miles away, run by my daughter on site - there is no suitable office space there. I also have a normal paye job.

I know the flat rate is £4 a week for working at home but can I claim this per job? And can I also claim for the self employment even though my home isn't the address of the business?

Am bit by bit working my way through the self assessment form but it's really complicated given my circumstances and will take me to Jan 31st to finish it at this rate!!

Thanks

richbeth

Hi,
as this is just to cover extra expenses I'm pretty sure this is £4 pw regardless of the number of employers.

Richard

cotswoldaccountant

It is perfectly allowable to claim the £4 working from home expense per job when completing your self assessment return. So you would claim £4 for each of the PAYE jobs (assuming, as you say, it is a condition of your employment that you work from home).

You may also claim the £4 per week for the self employed work that you do from home.

If you consider that any of the homeworking arrangements costs you more than £4 per week in terms of additional expenses, then more can be claimed, but this must be fully backed up with appropriate calculations and invoices for extra expenses in case of HMRC investigation. The £4 per week is often sufficient to cover most costs without you needing to spend time putting together complex calculations of total homeworking costs.

Eliza_2

Many thanks indeed. One year I did try to calculate it using number of rooms used/proportion of bills/amount of time type formula and ended up underclaiming as I couldn't be sure I had worked it out correctly and that HMRC wouldn't swoop on me!

One of the employers does give me a small amount towards phone/internet bills - around £10 a month so presumably I can't 'claim' in effect twice for this job.

Sorry I know this is peanuts in the grand scheme of things, but I always seem to end up paying too much tax in January just because I'm so worried about paying too little - I still can't get my head around the fact that if you're on PAYE your tax is calculated to the nth degree and reclaimed if a penny out, whereas for self employment you're trusted to get it right yourself!!

Thanks again.

cotswoldaccountant

For the employer who gives you an allowance towards phone / internet, I would expect the £10 per month to appear as an expense payment on the P11D that you receive from that employer after the tax year end. You would then include the £10 per month from the P11D on your tax return as an expense payment received from that employment, but you would also claim for an employment expense incurred by yourself, i.e. the £4 per week allowable "working from home" cost, i.e. £16 per month.

ceeforcat

cotswoldaccountant wrote: »

For the employer who gives you an allowance towards phone / internet, I would expect the £10 per month to appear as an expense payment on the P11D that you receive from that employer after the tax year end. You would then include the £10 per month from the P11D on your tax return as an expense payment received from that employment, but you would also claim for an employment expense incurred by yourself, i.e. the £4 per week allowable "working from home" cost, i.e. £16 per month.

This worries me a little - a payment of £10 per month sounds very much like a round sum allowance to me and, thus, is subject to tax and NIC i.e. treated in the same manner as a Car Allowance.

Eliza_2

To be honest, if it's wrong then it's all my fault. It's a small community organisation and I'm the only employee. I manage the paye and half the time I can never remmeber whether the paperwork I'm doing is as employer or employee.

They used to give me a sum to cover internet and phone at home, which equated sort of to around a quarter of my bills but was very fiddly so I changed it myself to £10 a month (less than originally but easier to manage) The board are fine with it, well to be honest they're not bothered one way or another! They want to ensure I'm properly remunerated but not interested in the details when I explain it to them.

Would I be better to not ask for anything from them and just claim it as a tax allowance on my s/e form then? Or claim something that actually calculates as a proportion of my phone and internet bill - I don't want to claim too much though as the money should go towards community projects not me. (However I don't mind claiming from the tax man, sorry HMRC!!!)

Thanks for all the help.

Liz

ceeforcat

The point that I was making is that an employer cannot simply pay you a round sum of, in your case, £10 per month to cover an expense or expenses, unless they apply for a dispensation to cover this. It would be taxable and liable to both employer's and employee's NIC.

Now if you were to put in a valid expenses claim every month to your employer, and reimbursed, there is no liability whatsoever.