Working From Home - Can I Claim Any Money Back For Tax?

If you have a home office, you can expect higher household bills. Why you might ask, well, for one, you will use more electricity because you will use your computer all day and other devices.

You will also use more gas for central heating; You may even notice that your water bills go up slightly.

If you work from home but are employed by a company, you have the right to claim a portion of these expenses on your tax bill at the end of the tax year. But HM Revenue and Customs in Britain would prefer it not. In 2005, it capped the tax break available for gas, electricity, water and telephone bills to just two pounds a week for salaried workers. In effect, by working from home you are saving your business money. The more people a company has working from home, the less it has to spend on its own bills such as electricity, gas, rental of premises, etc.

So why should the business keep these savings and expect the IRS to cover its costs? In fact, it is up to your employer to reimburse you for all costs of working from home and not the tax authorities. But unfortunately, most of the time, the company will not see that you benefit because you do not have to pay the travel expenses.

If you are self-employed and work from home, that’s another story, and a better one. You can claim some of your home bills, such as gas, electricity, telephone, and rent, against taxes. But you must show that your home office is only used for business purposes. So if you work in the corner of your kitchen, I don’t think the IRS would like you very much. The easiest way to determine what you are entitled to is to measure your square footage. For example, if your home office occupies fifteen percent of your home, you can normally claim fifteen percent of your tax bill.

My advice is that if you have an office outside of your home, it is best to speak with an accountant to calculate it. They know the exact amounts you can claim and how. These are the experts, so be sure to tell your accountant exactly what you use for business purposes around your home.