Working at Home Expenses

room_101

Hi,

I'm looking to pay myself an expense out of my company for working from home.

I've read the gov website (https://www.gov.uk/tax-relief-for-employees/working-at-home) and was planning on paying myself on a monthly basis (£18 as denotied in the document).

The document defines two values - £4pw and £18pm. I done a quick check to see how they equated. 18 * 12 = £216
4 * 52 = £208

Is there something obvious that I'm missing out on here?

I was planning to pay myself the £216 figure, but now I'm not sure. It's only £8 difference, but I'm just a bit curious as to why there is this anomaly?
I believe it is probably due to rounding errors between usage of months and weeks.

Is there a correct annual amount to claim? I'm struggling to locate a definitive answer online.

Thanks.

ComicGeek

There's a simple method which has a lower figure and a more complicated method which could have a higher figure. This weblink explains it well https://www.freeagent.com/guides/expenses/business-use-of-home/

The key thing is to be confident that you can justify it to HMRC - if you're not sure then don't claim for it!

room_101

Thanks for that info.

The gov website says you don't need to provide evidence for claims up to £18pm:

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 (for example, 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 (for example, 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.

I'm certainly not going to start mucking about over the sake of £100, but do you know where do they get those intermediate figures from in your link? It is not on the govenerment website.

Okay, I finally found the distinction between £4 and £18:

2012 to 2013 — 2016 to 2017 £4.00 (or £18 a month for employees paid monthly)

https://www.gov.uk/expenses-and-benefits-homeworking/whats-exempt

I'll speak with my account about it before I go claiming it. It is a small amount so I'm not really sure if it is worth it.

Slinky

If you are self employed and working 101+ hours per month from home, you can claim £26 per month.

https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

Aquamania

Slinky wrote: »

If you are self employed and working 101+ hours per month from home, you can claim £26 per month.

https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

The OP said this

room_101 wrote: »

Hi,

I'm looking to pay myself an expense out of my company for working from home....

From the link you provided (and going to the first page, the overview):

Simplified expenses can’t be used by limited companies or business partnerships involving a limited company.

https://www.gov.uk/simpler-income-tax-simplified-expenses/overview

Slinky

I think that must have changed since the last time I looked at it (last year) as my accountant had no issue with me charging £26 per month.

Oh well, hopefully the info may help somebody else.

ETA, this info may still be of use the op if he's self employed, he hasn't said his company is limited. Many people refer to their business as a 'company' even when it isn't ltd.

Slinky

Also if he is limited, don't forget to claim up to £300 of trivial expenses a year

https://www.gov.uk/expenses-and-benefits-trivial-benefits

room_101

Hi, I've decided not to claim the money for working from home as when I worked it out the time working actually at home would only have put me into the bottom band and I didn't think it worthwhile.

I'm a limited company with just myself as a director - so unfortunately going by the description of a close company I'll not be able to claim the £300 either I've just noticed that the link is for self employeed. I don't think that applies to me as I'm setup as an employee of my own company.

Slinky

Drat, they've changed this recently then, as see this article from October 16, directors of close companies were allowed to claim this

http://www.accountingweb.co.uk/tax/business-tax/trivial-benefits-far-from-trivial

Aquamania

eggha wrote: »

the last 2 posts are perfect examples of why DIY and tax is not always the best way unless you are prepared to get beyond the dumbing down of the info on the .gov.uk website and read both the HMRC manuals and have a means of being up to date with legislation
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21604

the trivial benefits rule for a close company changed wef 6 April 2016
A director (and their family members) can receive trivial benefits from a close company, but there are rules.
The rules you can read for yourself from the link above as i see no point writing out the manual that explains them

Cash benefits and benefits with money’s worth

Cash benefits, benefits that have a “money’s worth” (EIM00530) and non-cash vouchers (EIM16040) should not be treated as trivial benefits, regardless of how small the amount concerned....

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21861

ComicGeek

What are you suggesting here? That because the working from home expenses would be paid as money it wouldn't count as a trivial benefit under the £300 limit, and would therefore be taxed?? That surely can't be right, if it's a legitimate business expense and the costs incurred can be broken out in a logical and reasonable methodology.


I've been doing a lot of reading of the employment income manual, and it seems to me to concentrate on employee income (as per the title!) rather than allowance expenses from running a limited company. The examples I've seen for calculating home expenses are specifically for the self employed.


None of the accountants we've used over the years have been able to provide definitive answers. I wouldn't have any problem adding this to a P11d form and pay any NI on it, but I'm damn well going to claim for all business related expenses - otherwise I'm just subsidising the company from my own salary.