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What Expenses Can You Claim While Working from Home During COVID-19?

If you have been forced to work from home during the COVID-19 pandemic, did you know that you may be able to claim for expenses?

If you’re a business owner with employees working from home, they may be entitled to either reimbursements or tax relief for their expenses.

This post should hopefully clear up any confusion for employees or employers regarding working from home costs.

This article covers:

  • How much could employees claim?
  • What costs can your employees claim for?
  • How do you or your employees make a claim?
  • Can you claim for previous expenses?

How Much Could Employees Claim?

The simple answer is that there is a fixed rate that applies to most people. This is set at £6 per week.

However, if employees have higher expenses, they may be able to claim for more. For example, if the work is more labour intensive or if there’s a lot of travel involved using a vehicle for work.

If you’re unsure about these expenses, it’s wise to seek the advice either of your employer, accountant or HMRC.

What Costs Can You Claim For?

Those eligible for tax relief should be able to claim for any costs incurred while performing job duties.

You may be able to claim for equipment such as computers, office furniture or even the partial cost of rent or bills.

For example, you might be able to claim a portion of your home running costs/rent if you use one room dedicated to working from home. If you’ve had to buy a new desk to work from home, you might be able to claim for that too.

It’s important to keep a record of expenses in any case. For example, with travelling/vehicle costs, you will need to keep records of the distances travelled, mileage and fuel use - while keeping all these figures separate from any personal use of the vehicle.

Remember, anything you do try to claim for should be for the sole purpose of working. So, you won’t be able to claim for personal things you use or purchase not related to work or the business.

How Do You Make a Claim?

There are two ways to do this. Either employers can pay their workers £6 a week extra, which will remain tax-free or employees can claim tax relief of £6 a week.

If you need to claim tax relief, you can ask your employer for the rate of £6 a week to be deducted from your taxable income.

If you do Self Assessment tax returns usually, you can claim that tax relief there. However, if you don’t, all you will need to do is fill in a P87 form. You can easily do this online or via post.

To fill in the P87 form, you will need details such as your employer’s name and PAYE reference which you can find on your payslips. There will be a section for “Using your home as an office” which is where you need to put details of any extra money paid to you or repaid by your employer via tax relief.

Can You Claim for Previous Expenses?

If you’re wondering about previous expenses, you will also be able to claim these retrospectively if needed.

Make sure you have details of all your expenses before you submit a claim. You may even want to wait until you’re back at work to make the full claim so you can get it all done in one step.

Once you have submitted a claim to HMRC, you should hear back in a couple of weeks. However, bear in mind that HMRC is under a lot of pressure at the moment so you will likely have to wait a bit longer.

If you are a business owner and would like some advice on dealing with employees’ work from home expenses from a qualified accountant, get in touch with us today.