Working from Home – Tax

Working from Home

If you’ve been working from home over the past few months, you may well save on travel costs and lunches, but you’ll run up other bills, including heating and electricity. Some employers give their staff an allowance to cover those excess costs but some do not. If not employees can still claim a small reduction in their taxes for the time they were forced to work at home and not out of choice.

Rather than have to calculate exactly how much of your electricity bill is used for work, a relatively small level is agreed by HM Revenue and Customs for you to claim up to £6 a week in expenses without having to provide any paperwork to justify it.

That doesn’t mean you save £6 a week – you only save the tax you would have paid on it. That works out as £1.20 a week (or around £62 a year) for a basic rate taxpayer, or £2.40 a week (£104 a year) for a higher rate taxpayer.

There are two ways to claim expenses – either on your annual tax return, if you file one, or on a special form called a P87, which is available electronically via Government Gateway, or on paper.