Working from home - claim £18 a month

nik_k

Kitchen_Sink said:

But the report also appears to conflate a number of issues.
1. The £18 is a monthly limit an employer may pay an employee for essential homeworking without  the employee incurring tax/NI on that payment. It is to cover all home expenses (except business phone calls) not just gas & electricity.
2. It's entirely up to the employer what expenses they pay their employee, and what receipts they may or may not require.
3. HMRC do NOT pay expenses; they provide for tax relief allowance.
So even if you are successful in claiming the full whack as an allowable expense, that would only equate to a £3.60 pcm tax reduction for a basic rate taxpayer.
4. Claiming tax allowance for use of your home may affect other tax liabilities, possibly business rates being applied, or a different tax treatment of your home when you sell it (which is otherwise usually disregarded if it is your main residence)

So...after reading this, I'm wondering whether it's worth submitting an £18/month expense claim to my employer, and/or it's worth completing a P87 to gain tax relief allowance?  In the words of Tesco, every little helps!

badmemory

Well you could p**s your employer off when he has enough to worry about.  The only thing I would contemplate claiming for (& would only do it if I was really out of pocket) is the updating of my broadband to accomodate work use.

[Deleted User]

I’m sure the majority of people are saving money and/or time on their commute, not to mention the convenience of working from home too. 

Personally I wouldn’t think about claiming for working from home as I prefer it and it saves me money.

Kitchen_Sink

Well there seems to be some good news on this.

The fixed rate scheme is being increased to £6pw or £27pcm from the new tax year (6th Apr)

This information was included in a few (lucky?) initial recipients of this weeks MSE email, and is correct.

The bad news is that the item was then withdrawn from this weeks email for the vast majority of recipients as MSE Martin wants to seek clarification. He now has reason to believe that my post earlier in this thread is factually correct (but I'm not implying it was my post that made him wobble)

He explains the error here:
https://www.moneysavingexpert.com/news/2020/03/coronavirus-self-employed-and-employment-help/ (almost half way down the page)

He now has reason to believe, as I posted earlier, that this is not a flat fee you can claim, even as a tax deductable allowance from HMRC directly.
It is a flat rate scheme that your employer can pay up to if they are so minded to reimburse you for working from home, and HMRC does not require the employer to have that supporting receipts for that expense payment they make their employee. [But your employer may want yhem before paying you]
If your employer pays this amount (or a lower amount) the amount will not be taxed by HMRC.

If you want to make a tax allowance claim direct from HMRC using for P87, it would need to be a detailed claim including receipts (but if you have such receipts, you can presumably claim whatever amount you have the receipts for, assuming HMRC accept your claim)

As per the above article, MSE Martin is re-checking and hopes to report in next week's email.

In the meantime, this flat rate scheme is presumably only potentially useful to those who work for their own company, and I suspect most of those will take advice from their accountant, if not already done so.

oldcodger69

Working from home in the long term.  Martin: while during the virus problem working from home might well be the lifebelt that saves a job and even a business, such working arrangements are becoming ever more popular particularly in certain trades e.g. hairdressing.  Nevertheless with internet trading proving less need for shops etc. [indeed the high streets are becoming evermore darker], if offices follow suit, I suggest there will be a shortage of commercial taxes e.g. council taxes and the commercial power/water tariffs income will also fall.  Therefore while citizens are following guidance regarding elegible tax claims for such purposes, it is likely that the Council Taxes will increase to cover such losses from the commercial sides and the utility bills likewise. ISPs leave users in no doubt that if they exceed the normal residential limits, service provision will  be for renegotiation.  Thus, while Councils are tolerant at the moment of what many home properties are also being used for, they will see that as justification whenever they need to revalue the Council Tax bands e.g. residents parking permits.  Fingers crossed!