Employed and self-employed workers who are lucky enough to be able to work from home during the coronavirus outbreak could claim for a tax rebate on certain expenses.
From gas and electricity bills to business telephone calls, you may find that several household costs will rise as a result of working at home all day. And you may also end up shelling out for things like stationery and other equipment that’s necessary to do your job in a new setting.
Elsewhere, there are also savings to be made on your car insurance and monthly or annual season tickets.
Here, Which? explains the adjustments you can make to your finances while you’re working from home.
Tax rebates while you’re working from home
If your bills and other expenses increase as a result of working from home, employed and self-employed workers alike may be able to claim a tax rebate on what they’ve spent.
However, what you can claim for, and how you claim it, differs depending on your employment status.
If you’re employed
If your employer asks you to work from home, you should be able to claim tax relief on some of the bills you have to pay in order to carry out your work.
However, you’ll only be able to claim for things that are solely used for work purposes.
This includes things like extra costs for gas and electricity used to power your work area or the costs of business calls added to your phone bill.
When it comes to things like rent or broadband, these can’t be claimed for – nor can anything else that’s used for both private and business use.
How to claim
- Find out more: tax-deductible expenses
If you’re self-employed
Self-employed people working from home can claim for more costs than employed workers.
This includes a proportion of the costs for lighting, heating, cleaning, insurance, mortgage interest, council tax, water rates and general maintenance.
To work out this proportion, you’d need to calculate the amount of time you’re using your home for work, and – in the case of lighting and heating – how much of your home is being used.
If you work from home for more than 25 hours a week, you may be able to use HMRC’s simplified expenses system.
How to claim
You can only claim via a self-assessment tax return, which, as a self-employed worker, you’ll have to submit each year anyway.
As self-employed workers are taxed on their profits, expenses incurred from working from home can be deducted, therefore reducing the amount of tax you’ll pay.
- Find out more: self-employed tax allowable expenses
Tax payment help for self-employed and businesses
This is a particularly tough time for self-employed workers and freelancers who have lost work as a result of coronavirus.
HMRC has set up a dedicated new tax helpline to support businesses and self-employed people who are concerned about being able to make their tax payments due to the impact of coronavirus.
You can call this new helpline on 0800 015 9559. It’s open Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.
HMRC says you can discuss your specific circumstances, and may be able to set up an instalment arrangement, suspend debt collection proceedings and cancel penalties and interest in cases where administrative difficulties mean you can’t contact or pay HMRC immediately.
- Find out more: income tax for the self-employed
Does working from home affect your home insurance?
If, like many people, you’ve had to set up a new office in your home, you may need to let your provider know about the change, or possibly add additional cover for new items in your home.
If your work means there’s an increase to the likelihood of accidental damage, theft or if any client liability needs to be taken into account, then working from home could see your home insurance premium increase.
What’s more, if you’ve had to bring a load of tech and other equipment home from the office – such as laptops, cameras or printers – then your policy might not cover the added value, which is more of an issue if you’re self-employed. If your employer owns the equipment, then it should be responsible for insurance cover.
According to the Association of British Insurers (ABI), working from home due to the need to self-isolate should be covered by standard home insurance policies, if the work is clerical in nature.
If you are working from home and receive visitors for business matters, you will need to check with your insurer about whether your current policy covers you. The ABI says that, in some cases, there may be restrictions in cover, such as loss of money and theft being excluded unless there is evidence of forced entry.
To find out whether you need to up your cover, it’s best to check your policy and get in touch with your provider if there’s anything you’re unsure of.
- Find out more: home insurance explained
Cut down on your car insurance costs
If you usually drive to work, and therefore aren’t using your car nearly as much as usual, it may be worth contacting your insurer and asking to switch your policy details from ‘commuter use’ to ‘social use’.
Doing this could temporarily reduce your car insurance payments – but you’ll need to make sure you change it back once you return to the office.
If you’re not using your car at all, you could declare it off the road – this would mean you can cancel your car insurance policy (though watch out for any early cancellation penalties) and also get a refund on any car tax you’ve prepaid for.
However, you’ll only be able to declare the vehicle off-road if you have a private garage or driveway to leave it – it cannot be left on a public road. You’ll also need to officially inform the DVLA with a Statutory Off Road Notification (SORN) – you can register for this online.
- Find out more: car insurance explained
Get a refund on season tickets you’re not using
If working from home means you’re no longer using a monthly or annual season ticket for your commute, most public transport companies will let you cancel this and will refund you the remaining portion of your ticket.
You can then buy a new season ticket when you return to work.
You should check the terms and conditions on the operator’s website, as some won’t allow cancellation within a certain amount of time of the expiry date and may require you to go to the station you bought it from.
In general, though, season tickets from train, coach, tram and bus operators should let you cancel.
For more information on your UK transport rights, see our news story detailing what to do about train, ferry and coach tickets that you can no longer use.
Which? coronavirus advice
Experts from across Which? have been compiling the advice you need to stay safe, and to make sure you’re not out of pocket.
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You can keep up to date on our latest coverage over on our coronavirus advice hub.