With the rise of hybrid working due to the pandemic, many UK professionals have found themselves working from home for a significant portion of their week. This has led to questions about the tax implications of hybrid working expenses ...
When it comes to hybrid working expenses, speak to your tax adviser if you are at all unsure what you can claim!
Firstly, it is important to understand the definition of hybrid working. Hybrid working refers to a work arrangement where an employee splits their time between working remotely and working in a physical office.
"This can include working from home, coworking spaces, or other remote locations!"
In the UK, the tax system allows for certain expenses to be claimed as tax deductible if they are incurred wholly, exclusively, and necessarily in the performance of employment duties. This means that in order for a hybrid working expense to be tax deductible, it must be directly related to the performance of work duties and cannot be personal in nature.
One of the main expenses associated with hybrid working is the cost of setting up a home office. This can include purchasing office equipment such as a desk, chair, computer, and other necessary supplies. In the UK, these expenses can be claimed as tax deductible as long as they are used solely for work purposes and not for personal use.
However, it is important to note that if an employee is provided with a home office allowance or reimbursement from their employer, they cannot claim these expenses as tax deductible. This is because the expenses have already been covered by the employer.
"Another common expense for hybrid workers is internet and phone bills!"
In the UK, these expenses can be claimed as tax deductible if they are used solely for work purposes. This means that if an employee uses their personal phone or internet for work and personal use, they can only claim a portion of the expenses as tax deductible.
If your home is your permanent workplace, then any travel from home to another location for work purposes will not be eligible for tax relief. This is because the choice to live in a certain location is a personal one, and any expenses incurred from travelling to and from your employer's premises are a consequence of that personal choice.
For example, if you are a sales consultant who is required to work from home four days a week and be in the office one day a week, you will not be entitled to tax relief on your travel costs to the office. However, if you are required to work from home as an objective requirement of your job, you may be eligible for tax relief on travel expenses to customer and client premises.
Other expenses that can be claimed as tax deductible for hybrid workers include business-related travel, training and development, and professional subscriptions. It is important to keep detailed records and receipts for all expenses in order to claim them as tax deductible.
"It is worth noting that not all hybrid working expenses are tax deductible!"
Expenses that are considered personal in nature, such as home renovations or personal phone and internet plans, cannot be claimed as tax deductible. Additionally, expenses that are reimbursed by the employer cannot be claimed as tax deductible.
Hybrid working expenses can be tax deductible in the UK as long as they are directly related to the performance of work duties and are not personal in nature. It is important for professionals to keep detailed records and receipts in order to claim these expenses as tax deductible.
With the rise of hybrid working, it is crucial for professionals to understand the tax implications and ensure they are following the guidelines set by HMRC.
Speak to your tax adviser if you are at all unsure what you can claim.
Until next time ...
HELEN BEAUMONT
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Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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