Over the past few years there has been increasing number of employees working from home. This has become the norm in todays society with IT and computer software being that advance that you can see your own work computer screen and network at home. I can only see numbers increasing as the years go on due to ever increasing costs to commute, but the question remains is there any taxable benefit of working from home?
Working from home means you are likely to incur additional living expenditure such as gas and electricity but as an employee you can only claim a minimal amount. The Revenue give a guidance of a lousy £3 a week plus business calls will be allowable. For those employees that are interested you can find this in HMRC's Employment Income Manual.
For self employed individuals the picture is slightly better, generally you can claim a larger proportion of your annual home expenditure usually being around 20%. However HMRC tend to review these claims quite reglarly and thus you should look at the quality of the time you work at the home and speak to a tax advisor to work out an acceptable proportion.
There are loads of tax cases you can look at which provide great examples of working from home, the most famous one being Horton v Young 47 TC 60. Which concerned a self employed brick layer who had no office and went to different sites every day thereby using his home as his main office. The brick layer won this case when reviewed by HMRC and was allowed his expenditure claimed for use of home as office as well as travelling to and from home to jobs.
However this is just one of many cases and my advice would be that if you work from home and want to claim expenses speak to your tax advisor. In terms of the tax advantages in working from home, well in my opinion they aren't great ! The main benefits are mainly practical however if you do substantial work from home there are reliefs available to you, you just need to be careful !
Feel free to contact me for further information
mitch@ljd.uk.com
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