Working From Home - Save Tax

What it means for your finances.

If you’re working from home due to Coronavirus, you may be able to claim tax relief for some of the bills you have to pay.

You can only claim for things to do with your work, for example, business telephone calls or the extra cost of gas and electricity for your work area.

If your bills and other expenses increase as a result of working from home, employed and self-employed workers may be able to claim a tax rebate on what they’ve spent. However, what you can claim for, and how you claim it, differs depending on your employment status.

If you're employed

If your employer asks you to work from home, you should be able to claim tax relief on some of the bills you have to pay in order to carry out your work. However, you’ll only be able to claim for things that are solely used for work purposes. 

This includes things like extra costs for gas and electricity used to power your work area or the costs of business calls added to your phone bill. 

When it comes to things like rent or broadband, these can’t be claimed for – nor can anything else that’s used for both private and business use. 

How to claim

You can either claim through PAYE- where your rebate will be paid via your tax code over the following tax year, or via a self-assessment tax return.

If you’re self-employed

Self-employed people working from home can claim for more costs than employed workers. 

This includes a proportion of the costs for lighting, heating, cleaning, insurance, mortgage interest, council tax, water rates and general maintenance. 

To work out this proportion, you’d need to calculate the amount of time you’re using your home for work, and – in the case of lighting and heating – how much of your home is being used. If you work from home for more than 25 hours a week, you may be able to use HMRC’s simplified expenses system. 

How to claim 

You can only claim via your self-assessment tax return, which, as a self-employed worker, you submit annually anyway. Because self-employed workers are taxed on their profits, expenses incurred from working from home can be deducted, therefore reducing the amount of tax you’ll have to pay.