Still Working from Home: How Does It Affect Your Tax?
Working from home is the new normal due to the COVID-19 situation all over the world. According to the statistical data recorded during September 2020, 34.6 % of adults showed their house members worked remotely due to the pandemic. Another statistical survey shows that about 46% population is currently working from home, and 86% of the recoded population is working remotely due to the COVID-19.
Tax Implications for the Expenses of Work
Working from home has an implication on your taxes or job expenses also. You can claim relief for different taxes for working at home due to the pandemic. The parts of the electricity, gas, internet and water bills that you use during work from home can be claimed for tax relief.
Effect on the Employment Taxes
You can avail of relief on income tax through the rules set by the government for the employers and the employees. The effect of working remotely on your taxes are discussed in this part of the article.
Employers Rules
If you are the employers and have made arrangements between you and your employee, you can make a reasonable exemption on the tax payment. Your employee must work remotely under the provided arrangements.
Amount of Tax Exemption
In this case, you can avail of tax relief on the additional work expenses like the water, electricity, heating etc. According to the exemption rules set by HMRC, you may get the following relief on the tax:
- You will not have to justify the amount and get a payment exemption of £26 monthly or £6 weekly.
- You may also get relief on the additional cost that is sustained by your worker.
Employee Rules
The rules set by HMRC for the employees working at home are comparatively strict. However, there is a relief on the rules due to the current situation of the COVID-19 pandemic.
If you are obligated to work from home, and your employer cannot provide you with open office space, you can avail yourself of tax relief on the additional costs due to working from home. If you are still working from home, then you can deduct the additional charges. These additional costs include
- The electricity and heating bills of the space that you use at home for the work purpose
- The water bill of the metered water that you use while completing your obligatory duties as an employee.
- The internet and telephone bill that you use during work.
You can claim the tax relief even if you have to make the occasional visits to the office as required by your employer. It means that you can claim the tax relief and other implications if you work from home as directed by your employer and have to visit the workplace once a week or a month.
How to Quantify the Cost
Keeping a record of all the additional costs is a challenging job. To avoid any issue, a particular amount of £6 per week or £26 per month is accepted by the HMRC. This amount does not include the bill of the calls that are made for the work purpose. However, you will have to record every cost if you want to quantify the expense and want more deductions.
