Tax relief when choosing to work from home

patchyX2

I'm due to start a new job soon and my contract states (at my request) that I will be based remotely. 

Am I able to claim any type of tax relief to cover expenses incurred due to working from home? For example council tax, Internet, gas/electricity, computer equipment etc. 

I had a look on the gov.uk site and saw this:
"You cannot claim tax relief if you choose to work from home." 
But some of things I've read don't mention the bit about choosing the to work from home.

I'm a perm employee paid through paye, not self employed. 

Jeremy535897

If your contract of employment requires you to work from home, that enables a claim for working from home tax relief. If it just says that you can work from home if you choose, then no claim is possible.

patchyX2

Jeremy535897 said:

If your contract of employment requires you to work from home, that enables a claim for working from home tax relief. If it just says that you can work from home if you choose, then no claim is possible.

The exact wording is:

"11. PLACE OF WORK Your normal place of work will be your satellite office . The Company reserves the right to change this on a permanent basis upon one month's notice to you."

They have an office and I could work there, but I specifically requested not to as it would cost a lot of time/money commuting, which is why it's in my contract. So technically I chose to work from home, but I'm not sure how hmrc would know this. 

Jeremy535897

Is the "satellite office" your home then? If not, the wording of the contract of employment is of no help at all.

If it is your home, you have to meet the basic test for tax relief in section 336 ITEPA 2003:

336 Deductions for expenses: the general rule

(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.

The problem words are "obliged to incur and pay it as holder of the employment". That is why HMRC says that the contract of employment must require you to work from home for working from home expenses to be allowed. During 2020/21 and 2021/22, some latitude was given where you had to work from home due to coronavirus, but that is not going to happen for a new job. The word "will" after "normal place of employment" is helpful though, as it could be interpreted in this way.

unholyangel

Jeremy535897 said:

Is the "satellite office" your home then? If not, the wording of the contract of employment is of no help at all.

If it is your home, you have to meet the basic test for tax relief in section 336 ITEPA 2003:

336 Deductions for expenses: the general rule

(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.

The problem words are "obliged to incur and pay it as holder of the employment". That is why HMRC says that the contract of employment must require you to work from home for working from home expenses to be allowed. During 2020/21 and 2021/22, some latitude was given where you had to work from home due to coronavirus, but that is not going to happen for a new job. The word "will" after "normal place of employment" is helpful though, as it could be interpreted in this way.

I don't think it is helpful. Obliged to incur and pay as holder of the employment essentially means anyone holding that job would have to incur the same type of expense. 

OP seems to fail on the choice element and facilities available at employers premises element. 

But, if wfh under formal arrangements then the employer may be able to pay an amount tax free, which would obviously be better for OP as it wouldn't just be the tax they'd get back.

Whether employer would be willing to do this after already amending the contract at OPs request to allow OP to save time/money on commuting will depend on the employer.

mvteng

so, if obliged to work at home, What is a reasonable amount to claim?

mvteng

mvteng said:

so, if obliged to work at home, What is a reasonable amount to claim?

Answering my own question - Found this on HMRC website

How much you can claim

You can either claim tax relief on:

• £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs
• the exact amount of extra costs you’ve incurred above the weekly amount - you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).