Can you claim tax back when you work from home? It’s cold, gloomy and the days are shorter than we may like. Snow has fallen in many parts of the UK, with many opting to work from home during this period to avoid traffic and delays on their commutes.
But with this comes the worry of energy prices being shifted from employers to employees. Working from home uses far more energy for the worker – from making cups of tea to charging mobile phones, laptops, tablets, and having lights on. It all adds up, with a higher cost being placed on those usually in an office or workplace.
Ofgem, the energy regulator within the UK, recently increased the energy price cap to £3,549 per year for dual fuel for an average household in October 2022. This has caused widespread worry for millions of households across the country. Plus, HMRC have closed phone lines and online services in recent weeks as the result of technical issues, leaving many Brits in limbo, with urgent queries about their tax returns.
What does it cost to work from home?
A recent study by leading tax-refund app, Tommy’s Tax found that 50% of Brits say the cost-of-living crisis is severely crippling their personal finances. Thus, many people are desperate for the tax-refunds they deserve in the current climate.
Half of the working population worked remotely during the peak of the pandemic and associated lockdowns, with 84% planning to continue their at-home work life, according to the Office for National Statistics (ONS). Additionally, reports show that under the current energy price cap, an 8-hour day working from home could cost more than £30 per day – a huge hidden fee.
These costs are hidden, including heating, electricity and broadband connection costs. Improving tax literacy could provide taxpayers with the means to access tax returns without delay, and help those working from home both permanently and on a flexible basis, say Tommy’s Tax.
The research from Tommy’s Tax further found that over one third of Brits (36%) say tax is a topic in life they understand very little about. Just over one quarter of respondents (26%) said they haven’t even thought about their tax bill.
Tommy’s Tax encourage workers to discuss the cost of working from home with their employers. It is up to the employer whether they want to make payments for any additional costs incurred as the result of remote working. The payments are tax-exempt, so some employers may be encouraged to make these payments.
The tax-refund app also suggest that workers may be able to claim a flat rate tax relief of £6 per week. This is to help with the cost of energy and other costs associated with working from home. To claim this, workers do not need to keep receipts, however you must be contractually required to work from home – for example, if your employer does not have a physical office or workspace for you to use.
If workers keep receipts for utility bills such as gas, electricity and the internet, and be able to identify any changes that have occurred as the result of working from home, they may be able to claim tax relief on this. It is a more intrusive approach, but could result in a large amount being received back as the result.
Tommy Mcnally, CEO of Tommys Tax, says:
“The recent drop in temperatures has highlighted to many that there are lots of hidden costs related to working from home. While it may seem that workers are saving in lieu of not having to commute, they may be paying more than they expect when working from home in the form of gas, heating, electricity, broadband and so on. Here at Tommys Tax, we want to highlight that Brits can claim back tax in relation to nearly all of these costs.
“The issue is that there still is a huge knowledge gap when it comes to taxes, and our proprietary research highlights this. It’s more important than ever to stay well-informed in relation to taxes and what workers can claim back when it comes to their line of work.
“That is why we’re here to help with the entire process for workers across the country. One of the ways we help is by educating customers about the various tax rebates that people are eligible for, but don’t make use of and that is where we’re here to help. Taxes can be boring, confusing and anxiety-inducing, but if done right could make a real difference to people’s lives.”