You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19). You cannot claim tax relief if you choose to work from home.
Additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection. They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax. You may also be able to claim for the refurbishment costs of setting up your home office and equipment such as desk, chairs, office equipment etc….
You must be able to prove this to HMRC if they query the expense. So you need to keep receipts of all costs. Also, if you are claiming utility bills and insurance etc… you need to show that there is an increase and you are only claiming the increased cost not the total costs.
You may also consider drafting a formal rental contract between the property owner(s) and your company based on a formal rent valuation. You will need our help if you do this as there are a number of implications such as imposition of business rates, personal tax on the rent received and breaching mortgage or home insurance rules. So be careful.
Roger GUNNING FCMA, CGMA
We are regulated by the Chartered Institute of Management Accountants. The CIMA Professional Qualification is recognised worldwide as the most relevant global finance qualification for business.
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