Home office furnishing tax relief for working from home?

drgasasdsa

HMRC's website has the following to say about equipment for working:

In most cases you can claim tax relief on the full cost of substantial equipment, for example a computer, you have to buy to do your work. This is because it qualifies for a type of capital allowance called annual investment allowance.

MSE already has a blog post about this, but the previous page speaks of bills, and:

You may be able to claim tax relief for some of the bills you have to pay because you have to work at home on a regular basis. You cannot claim tax relief if you choose to work from home.

I normally work in an office (employed, not self-employed) and due to COVID-19 the office is closed and I must work from home. Am I eligible for tax relief on:

• a purchase of a desk and chair for working at home?
• a monitor for connecting to a company-issued laptop?

The relevant HMRC pages (can't post actual links, just paste them into your browser):

gov.uk/tax-relief-for-employees/working-at-home

gov.uk/tax-relief-for-employees/buying-other-equipment

(they're in the same section, one after the other)

Cheers.

uknick

The general rule for an employee claiming expenditure is that the expenditure has to be wholly, necessarily and exclusively for work purposes.  Note, all three have to be true.

If you were to claim once the COVID restrictions have ended and you go back to the office, you'd have to throw away the items as they are no longer required to do your job.  If you don't, you fail the wholly test.  Unless that is you move them all to your office and then continue to use them and never take them back home.

So, do you really want to spend several hundred £s, get no more than 45% (depending on your marginal tax rate) of it back in tax relief and then throw it away in a few months time?

The capital allowance link is wrong (or to give HMRC the benefit of the doubt, not clear) as it only relates to self employed people.

jimmo

The specific rule for employees to claim capital expenditure is that machinery or plant is necessarily provided for use in the performance of the duties of the employment.

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim36520

 

Note that there are is no wholly nor exclusively tests for capital allowances.

Both the desk and the monitor would come within the definition of plant and machinery so no problem there.

As to "necessarily" lots of people seem to manage to work at home with their laptops on their laps, coffee table, dining table or kitchen work surfaces without a problem so HMRC would be perfectly justified to ask you why you specifically need a desk.

Similarly lots of people seem to manage just using the screen on the laptop so why do you need a monitor as well.

If you feel you can convince HMRC on challenge that both the desk and the monitor are necessarily provided by you the way is open for you to make a claim.

You would also need to explain why your employer does not provide the equipment you need.

 

As I said above there are no "wholly and exclusively" tests for capital allowances. That means that if the plant and machinery is used exclusively for work you can include the full expenditure in your capital allowances claim. If there is mixed business and private use the business proportion of the capital allowances may be claimed.

Moving on, the link I gave above says that, once the necessary test is passed, the capital allowances rules apply to employees in exactly the same way as they do to businesses.

Once the lockdown is over you will presumably return to working in your office, the homeworking equivalent of cessation of trade or taking an asset out of a trading business into private use.

If you originally claimed capital allowances in the form of AIA (100% of the business proportion of the cost) you will face a balancing charge (100% of the business proportion of the sale price or market value at the point of ending home working).

All in all that means that you can claim tax relief on the business proportion of the depreciation of the desk and monitor whilst they were used for homeworking.

You most certainly have a potential claim. Whether it is worth your while claiming is something you need to judge for yourself.

uknick

Jimmo, thanks for the correction as to employees claiming capital allowances.

Edit - Just had a look at Taxfiler which doesn't allow employees to have capital allowances.  They're only accessible if you add self employment as one of the sections.

[Deleted User]

uknick said:

Jimmo, thanks for the correction as to employees claiming capital allowances.

Edit - Just had a look at Taxfiler which doesn't allow employees to have capital allowances.  They're only accessible if you add self employment as one of the sections.

You may have misread this - it comes under other expenses and capital allowances.

https://taxfiler.co.uk/support/employment/

uknick

purdyoaten2 said:

uknick said:

Jimmo, thanks for the correction as to employees claiming capital allowances.

Edit - Just had a look at Taxfiler which doesn't allow employees to have capital allowances.  They're only accessible if you add self employment as one of the sections.

You may have misread this - it comes under other expenses and capital allowances.

https://taxfiler.co.uk/support/employment/

purdyoaten2 said:

uknick said:

Jimmo, thanks for the correction as to employees claiming capital allowances.

Edit - Just had a look at Taxfiler which doesn't allow employees to have capital allowances.  They're only accessible if you add self employment as one of the sections.

You may have misread this - it comes under other expenses and capital allowances.

https://taxfiler.co.uk/support/employment/

Thanks, I did miss it.  I was expecting to see something similar to the self employment capital allowances table.  

MDMD

uknick said:

The capital allowance link is wrong (or to give HMRC the benefit of the doubt, not clear) as it only relates to self employed people.

This is a common misconception but s15(1) of the Capital Allowances Act 2001 gives what is a qualifying activity for Plant and Machinery Allowances. Subsection (i) permits it to be claimed by an employee.

http://www.legislation.gov.uk/ukpga/2001/2/section/15

rabh

I've been wondering exactly this. Thanks for all the useful discussion.

tristanm81

Just curious about whether anyone has been successful with a claim for office equipment? (chair / desk / monitor)

I don't think my employer would reimburse me for a chair and desk so am wondering whether I can claim anything directly. From what I've read, it seems unlikely that a claim can be made.