Working from home advice please...

djpatrick

Hello All,
I'm new to this forum so please be kind!
My company has announced an office closure where the majority of employees are "expected" to work from home. This means signing a new contract so that your primary place of work is your home address. Now, there's lots of talk about tax and what to look out for, so I thought I'd ask the question here. What does this change mean for me and my colleages? In terms of tax benefits/relief, mortgage, insurance (not car)
Please assume most of us do not do self assessment. Does this change things so that we should do self assessment? My company has stipulated we should get indepedent tax advice - but who should pay for this?
Start up costs are usually high - we are given a start up amount, which after tax is not much at all. For me this would be quite a bit as my home is a family home and I can not make a space available purely for home working. What are my rights in this situation?
Please, any help really appreciated!!

JasonLVC

Some of your post is confusing and I'll explain as we go along!.

If your place of work is primarily your home then there are some tax benefits such as claiming a % of household running costs against your tax allowance (that is, you can earn more before being taxed). The calculation is based upon the number of rooms (bath/bed/dining) over those used for business (usually 1 bedroom/spare room) and that % applied to all running costs (gas, elec, maintennace, but not mortgage costs) and is added to your tax code to increase your before tax earnings - it will not be much though, a few hundred pounds, maybe even a grand in earnings before being taxed, depending upon size of house and overall household outgoings.

Your post suggests you are being moved out of an office and made to work from home - Are you still employed by the company or are they suggesting you are now self-employed?. If you can answer that, it'll help clear up a few things. Can you confirm if you are in effect being sacked and re-employed on a self-employed basis, or if your contract has simply been changed to change where your 'office' is (ie, your main place of work is now your home).

Normally when a company turfs out the staff, they sign new contracts to show change in principal work place (a legal requirement), they pay for suitable adjustments such as installing telephone lines/broadband/laptops into your home as well as ensuring all Health & safety obligations are met including assessing your home workplace and providing chairs/furniture as appropriate. You mention a 'start-up' allowance which I can only assume is similar to what I've just noted but for this to be taxed? is very unusual as is not a benefit in kind or taxable, unless it is a start-up loan for you as a new self-employed person, hence my confusion as to whether you are employed or not. Perhaps you're just unsure of tax in general and are assuming this will be taxed, it most likley isn't going to be.

If it is left to you to customize your workplace, I've not come across that before as the employer is responsible for your workplace - not you, even if it is your home and to give you a few hundred quid and expect you to buy appropriate office furniture with it is most unusual. Why not just blow it all on fags?. Health & Safety rules apply at your home if it is your primary work-place - so office chairs, tables, positioning of equipment, etc, etc.

Suggesting you seek independant tax advice is also a worry as the employer should already know the rules on home working (as per my 1st paragraph) as does your reference to self-assessment which also leads me to think your post has some stuff missing from it or has been mis-understood as a simple move of office to work from home doesn't require tax advice, but setting up as a self-employed person would. Have a look at this link , it's a bit technogeek, but might help you :-

http://www.taxationweb.co.uk/taxdoctor/16.php

It is not uncommon for home working to take place in bedrooms or living rooms, provided suitable adjustments have been made and paid for by the employer. Technically, they should have assessed each staff members situation and ifi is is not possible for you to work from home (ie, you live in a studio apartment with five blokes, or have no suitable 'office space'), then they shouldn't be making you work from home, although the alternative is to make you redundant - so if you want to keep on working, find a space somewhere.

Can you post here, if you can, whether you are still employed with them or whether you are becoming self-employed, clarify what this 'start up fee' actually is and I'll be able to provide more details.

You can PM if you prefer, I'm hoping that you've simply mis-understood your employers intentions and how it all works and my assumptions above have clarified the matter for you, but by all means clear up any part I've mis-understood and I'll try to help further.