Five Minute Guides

Director or Employee - Claiming tax relief on the use of your home

The expenses incurred for working as home, like other business expenses, must be wholly and exclusively in the performance of the employee's duties.

In practice that means that relief can only be allowed for:

the additional unit costs of gas and electricity consumed while a room is being used for work
the metered cost of water used "in the performance of the duties" (if any). Water rates are not allowable
the unit costs of business telephone calls (including "dial up" internet access)

It may be difficult for employees to calculate the exact amount of the allowable additional costs that they have incurred as a result of working at home.

You may therefore accept that employees who satisfy the conditions for relief are entitled to a deduction of Ł3 (exclusive of the cost of business telephone calls) for each week that they are required to work at home, without having to justify that figure.

Employees who wish to deduct more than Ł3 per week will be expected to keep records and to be able to show how their figure has been calculated.