Top 5 Working From Home Expenses To Be Aware Of

Working from home – or hybrid working – has become the new norm for many professionals, especially since the COVID-19 pandemic. From 2022 – 2023, 44% of the UK’s workforce would either work from home or work on a hybrid basis.

While the shift to remote work offers a range of benefits, including flexibility and convenience, it also comes with its own set of challenges and expenses.

There are a few expenses to be aware of when it comes to working from home and understanding them is most beneficial. To find out more about our top five working-from-home expenses, continue reading.

Costs to Keep in Mind

There are several business expenses to keep in mind, from internet costs to utility bills. These significant expenses can be difficult to keep up with but they’re necessary to work from home effectively.

If your job requires making business telephone calls or hosting online video sessions, which most jobs do, you’ll need to have efficient wifi and a phone contract; however, both can be costly.

Among telephone or internet expenses, there’s a range of additional household costs to think about. Let’s take a look at some of the top expenses to be aware of before you pay your tax bill to the government while working from home.

Utility Bills

One of the most significant household expenses when you’re working from home is paying utility bills. Working from home undoubtedly increases the usage of electricity and heating, resulting in rising costs. Electricity bills alone can cost up to £1,923 a year – but the good news is that you could claim a percentage of this on your tax bill.

Using electricity is a necessity for most professionals who work from home, and utility bill increases are often unavoidable. Although many individuals remain conscious of their electricity and heating usage by implementing energy-saving measures, a lot of people don’t.

Luckily, if you use your broadband for both personal and business purposes, you can claim a percentage of the cost.

Internet and Technology

A stable and reliable internet connection, along with up-to-date technology, is essential for remote working. However, although they’re allowable expenses, investing in high-speed internet comes at a cost.

The average person spends around £26.90 per month on internet – and these costs can add up over time. However, having efficient internet access is vital.

As well as dealing with broadband costs, professionals require modern technology to complete their work, including laptops. If you’ve purchased a laptop solely for business use, you should be able to claim tax back on the full cost as a capital asset.

Home Office Setup

Having a dedicated workspace at home is crucial when you work remotely. If your office space is used for work purposes, you could potentially claim tax relief.

Home office equipment is often expensive, but for most individuals who work from their property, it’s crucial to have. Office chairs, desks, general office supplies, and stationery are all necessary pieces of equipment needed to help make working from home easier.

When You Can and Can’t Claim Tax Relief

You’ll be glad to know that you’re able to claim tax relief on certain expenses if they’re significant while working from home. You can claim expenses for a range of bills, including council tax, flights, and even property repairs, depending on various factors.

You cannot claim tax relief for food, drink, or entertaining clients in your own home, to name a few. To claim expenses, you’ll need proof of receipts, contracts, and bills.

Generally, you should be able to claim relief on council tax, but you might find that you’ll have to pay business rates depending on how often you use your home for business purposes.

Additionally, you can claim some tax relief on a percentage of your gas and electricity bills. If you’re required to travel for work purposes, you can also claim tax relief for both flight costs and accommodation, too.

If you work from home and have a mortgage, you’ll be able to claim tax relief on a proportion of the mortgage interest that you pay, but not the overall capital repayment. Although there’s a range of expenses that you can claim tax relief for, there are several that aren’t covered.

Unfortunately, you’re unable to claim tax relief for food or drink unless you’re travelling for work. You also won’t be able to claim for everyday clothes. However, if you’re required to wear a specific uniform, you can. In most cases, it’s also highly unlikely to be able to claim tax relief for medical treatment.

Do You Require Expert Tax Advice?

If you work remotely and remain unsure of what you can and can’t claim tax relief for, you’ll be glad to know that we can help.

At DH Business Support, we offer expert tax advice services, providing customers with knowledgeable insight and crucial information regarding all aspects of tax.

If you want to minimise your costs when you pay tax, we can offer further advice on how to do so. If you believe that there are expenses which you can claim tax relief for, we can assist you. We understand that working remotely might be new to some people, which is why we offer such services.

It’s vital to understand what you’re entitled to claim tax relief on, especially when you work from home every day. Our team of experienced accountants has a wealth of knowledge and experience under their belts, ready and waiting to help new clients.

Helping a wide range of clients with self-assessment tax returns, our team are here to simplify the process while informing you of what can and can’t be claimed. Your self-assessment tax return can be completed with our trusted team of specialists here at DH Business Support.

We aim to improve the service that accountants provide; by offering clear communication and transparency, we’ve been fortunate enough to work with clients from a range of locations across the country and maintain great client rapport.

If you’d like to find out more about our services, please don’t hesitate to contact us today. We look forward to hearing from you.