Anyone work from home? Expenses, tax and allowances question

[CogitoErgoSometimes]

Have just started working FT from home at the request of my company so that we save office costs. It's going to increase my household bills etc so I need to be compensated. The HMRC website tells me I'm only entitled to £3/week before I get taxed, unless I can show that they are reasonable additional expenses incurred. But what is reasonable? I have an electricity bill, for example, but I can't get a print out that specifically tells me the extra I'm using by being home all day. Suppose I could get a flat amount added to my salary and just pay the tax on it.

Does anyone else work from home for an employer and, if so, what arrangement do you have for this? Thanks in advance

I get 85 pounds a month (before tax) added to my salary for homeworking expenses. My phone line and broadband is paid directly by work as part of their overall phone services. All print supplies etc are expensed

I work at home but am self employed, and the rules re claiming for household bills are along the lines of if you have a seven room house, say, and work in one of them, then you are entitled to claim one-seventh of household bills against tax. You don't have to supply actual meter readings or anything.

I'm not sure how that would work as an employee, but it seems a good enough rue of thumb to me. So to get a figure as to how much of the bill should be covered by your employer, add up your mortgage/rent, electricity and gas and divide it by seven (or the number of rooms in your house).

Make sure your insurance covers you as well - or that your employer has home workers insurance in place.

Thanks CMOTD. I was hoping for about £85 funnily enough. I pay 40% tax so would they pay me £140-ish and the tax-man takes £55? Is that how it works for you?

Thanks Wordsmith. Wow... if I totted up all my household bills including the mortgage and divided it by the number of rooms (8) I'd be quids in.

No, they put 85 in my salary, then the tax man takes 40 (or whatever). But, I think that is about right tbh

Looks like a lot of tax when you write it down.

"I work at home but am self employed, and the rules re claiming for household bills are along the lines of if you have a seven room house, say, and work in one of them, then you are entitled to claim one-seventh of household bills against tax. You don't have to supply actual meter readings or anything."

That's not completely correct. You need to apportion by TIME as well as area/no. of rooms etc. If you have a room you use as a study 40 hours a week and 2 hours a week to do your own paperwork etc. , then you can claim 40/42 of this room. But if you do your work on the dining room table, the percentage is probably less.

The situation is slightly different for employees rather than the self-employed: probably best to start here (HMRC) and come back with any questions.

Note that as long as your claim is fair, you should not suffer any tax or National Insurance on it.

Thanks. The company is saving thousands by closing the office. I've had to chuck out a load of crap convert a room for the purpose, have telephone lines run in and various other niggly things that, tbh, I could have done without. The room in question is not on the central heating system so I'm using one of those portable radiators which I know eats electricity. I'm aiming for 'fair' but do not want to end up out of pocket.

I work from home but to be honest the £70 I save per week that I used to spend in petrol driving to the office more than makes up for any additional heat/light costs so haven't questioned it. Company do provide blackberry, printer, laptop, ink cartridges and paper though. I also get paid 42p per mile if I do have to drive anywhere. I spend less on lunches/random bits of lunchtime as well so overall better off. But it can be lonely and I sometimes struggle with motivation!!

I didn't even used to spend money on fuel because the company picked up the tab for the car. :) Doesn't help that the company has its headquarters overseas so, whenever these sorts of things come up, they get into a bit of a flap about keeping to UK tax rules and it falls to muggins to find out what she can.