Working from Home – Director and Employees?

Director or employee: Directors and employees of a business can claim £26 per month for use of home on a flat rate basis.

Working form home can only be claimed when you are required to work at a distance from the office for your job, or your employer does not have an office.

Alternatively, you can claim actual costs which may include itemised business calls from a home phone, or a second business line, light, power and heat, and any insurance policies which have business elements added on. These would be apportioned based on the amount of time spent at home, and the percentage of home used. It is usually more cost- and time-efficient to claim the flat-rate amount, however if you believe the amount to be more than £26, it would be worth doing the calculations. Our clients are provided with a spreadsheet to calculate this at the end of their financial year.

NOTE: council tax, water and mortgage interest or rent cannot be claimed as they would be paid anyway, and are therefore not deemed to be incurred wholly and exclusively for the business.

If you complete a self assessment tax return, you can claim for these expenses via the employment pages of your self assessment. If you are an employee who doesn’t complete a self assessment, you can claim via the HMRC website.