After six months of working from kitchen tables and makeshift desks, many of us may have seen our outgoings increase.
And following Boris Johnson’s announcement yesterday, whereby he suggested the nation work from home where possible, our domestic offices could continue for another six months.
Energy bills could soar by nearly 20 per cent this autumn and winter for those working from home five days a week, according to comparison site energyhelpline.
Stopping in: Following Boris Johnson’s announcement, whereby he suggested the nation work from home where possible, our domestic offices could continue for another six months
And employees could still be liable for tax and national insurance contributions on company benefits, such as cars, if they are not using them.
So, here, Money Mail has outlined the top tips from accountants on how you can claim what you are entitled to after working from home…
Sweet relief for expenses
You can claim tax relief if you are required to work from home on a regular basis, says Caroline Miskin, technical manager at the Institute of Chartered Accountants England and Wales (ICAEW).
But not if you choose to work from home. You can claim for additional household expenses such as work telephone calls or the extra cost of gas and electricity up to £6 a week, without needing to provide receipts.
This increased from £4 a week on April 6. Above this, you will need evidence of your costs.
However, Ms Miskin says you cannot claim for things you use for work as well as privately, such as rent or broadband.
If you already file a self-assessment tax return, you can claim for your work expenses on the form under ‘using your home as an office’.
You can claim for additional household expenses such as work telephone calls or the extra cost of gas and electricity up to £6 a week, without needing to provide receipts
If not, you will need to fill in a P87 form at the end of the tax year. For more information see gov.uk/ guidance/claim-income-tax-relief- for-your-employment-expenses-p87.
Ian Dickinson, tax director at UHY Hacker Young, says: ‘Employers are incentivised to pay this expense upfront before claiming tax relief on the costs from HMRC. The amount claimed back for each employee can be negotiated on an individual basis if you’re able to prove that your utility bills have dramatically increased while working from home.
‘If your employer is unwilling to pay, you can claim the relief yourself directly from HMRC. Once complete, the claim will be included in your tax coding and the relief will be given in your monthly take-home pay.’
Save on office gear
If your employer agreed to let you buy a printer, laptop or other equipment to help you work from home, you should get the amount reimbursed without being taxed. This could save you hundreds of pounds.
The Government has created a temporary Income Tax and National Insurance Contributions (NIC) exemption for employer reimbursed expenses that covers the cost of relevant home-office equipment.
Nigel Morris, employment tax director at MHA MacIntyre Hudson, says: ‘Let’s say an employee is forced to work at home during lockdown and their employer agrees to them purchasing a desk and printer that costs a total of £750, which is then reclaimed from the employer.
‘The exemption means no Income Tax/NIC is due, which will save £343.50 for a typical employee and, for higher rate employees, it will save £418.50.
‘As an employee you do not have to do anything other than remind your employer that the amounts they have reimbursed you for this equipment is not a taxable benefit due to Covid-19.’
Energy bills could soar by nearly 20 per cent this autumn and winter for those working from home five days a week, according to comparison site energyhelpline
Call off work perks
Some employee perks, such as a company car, are known as ‘benefits in kind’ and are liable to tax and National Insurance.
If you have not been using the car you can leave it on your driveway tax-free, says Mr Morris. You can literally hand back the car itself, or return the keys and fobs to your employer, rather than the vehicle itself.
The benefit will be withdrawn after 30 days of the car being ‘unavailable’ to you — or after you have ‘returned’ it.
Agree the terms in writing and get your employer to acknowledge receipt of the keys.
If you haven’t used your car since March you cannot backdate your claim, but you can start the hand-back now to avoid paying for something you are not using.
Mr Morris says: ‘The tax law is based on availability and not just actual use, so tax on a benefit in kind during lockdown or where private travel is restricted can seem particularly harsh as you are being taxed for something you can’t use.’
You should also speak to your company about withdrawing the fuel benefit tax, too.
He adds: ‘Private fuel benefits are based on a full tax year calculation, which is then reduced proportionately if the car is unavailable for part of the year and which can also be reduced if free fuel is withdrawn in a tax year and not reinstated.
‘Company car drivers need to be careful how they deal with private fuel later in the tax year, to ensure that the benefit in kind is not reinstated and the tax and NIC savings lost.’