As promised last month this blog will look at expenses that are allowable for tax purposes for an employee of a company, that works from home.

Working from home

If an employee works from home the costs incurred in such working e.g. electricity, gas, phone bills etc are allowable for tax purposes. However how much is allowable depends on whether the employee works at home because they choose to or because they have no choice.

If they choose to work from home, HMRC allow for “reasonable employer contribution” to be tax free. As of April 2012 this employer contribution is £4 per week.

If the employee does not have any choice but to work from home (e.g. there are no employer offices available) then weekly expenses up to £4 per week do not need receipts. However any expenses incurred above this level must have supporting evidence.

Please note that expenses such as council tax, mortgage interest and phone line rental are not allowable expenses for tax purposes.

If the employee does not have any choice but to work from home then the employee will also have allowable expenses for travel from home to workplaces that are required to fulfil their job.

If you have any queries about this or any other accounting issues or want any further information do feel free to contact me :

or visit my website

A couple of important reminders.

Don’t forget that the new NISA’s are now available to replace ISA’s. The NISA’s allow each individual to invest £15000 tax free which can be either cash, shares or a mix of shares and cash.

Both Child Tax Credit and Working Tax Credit renewals must be completed by 31st July or the payments will stop. If you are entitled to them make sure you do not miss the 8pm deadline.

Next month we will be looking at child care costs and tax-free childcare.  Have a great summer and enjoy the sunshine while it lasts.