Many people have been working from home since the pandemic, but with household costs rising all the time, the money you’re saving on your commute is probably going straight onto your bills. So how can you keep costs down? Can you get some of that money back?
According to Google trend data, searches for “working from home what can i claim” have risen by 214% in the last month, so Adam Clark, founder of My Local Toolbox, answers the most Googled questions about how to save money on bills when working from home – from what you can claim back, to council tax discounts you might be eligible for but not know about, and how to keep heating costs down.
WHAT CAN I CLAIM?
IF YOU’RE SELF-EMPLOYED
If you’re employed, HMRC doesn’t generally allow claims for things like rent or mortgage costs unless part of your home is used exclusively for business – but if you’re self-employed and work from home, you can claim a part of your housing costs as part of your allowable business expenses. This can include mortgage or rent interest (but not the full mortgage payment), council tax, utility bills, home insurance, and maintenance and repairs to the work area, and can be calculated as a flat rate simplified expense, or actual cost based on usage.
FLAT RATE SIMPLIFIED EXPENSE
If you work from home for 25 hours or more a month, this method allows you to calculate your allowable expenses based on the hours you work from home. This means you don’t have to work out exactly what portion of your utility bills are for your business use, for example. If you work from home 25 – 50 hours a month, the flat rate is £10 per month, 51 – 100 hours a month has a flat rate or £18 a month, and 101 and above has a flat rate of £26 per month. For example, if you worked 40 hours in 6 months of the year, 60 hours in 4 months, and 110 hours in 1 month, you could claim £176 for the year.
ACTUAL COSTS BASED ON USAGE
In order to claim for your actual expenses, you need to work out the proportion of your home that is used for your business. Divide your costs based on the number of rooms you use for work, and the hours spent working. For example, if you have 5 rooms in your home and you use one for work, 40 hours a week, you can claim the proportional percentage of your expenses based on this usage – (hours worked/hours in a week) x (1 room/total number of rooms).
IF YOU’RE EMPLOYED
HMRC allows you to claim a flat rate of £6 per week – which amounts to £312 over the course of a year – if you have to work from home, either full- or part-time. For example, if your job requires you to live far away from the office or your employer doesn’t have an office that you can work in, you can claim the flat rate without having to provide receipts or evidence of your bills. You are allowed to claim for things that you use for work, like business phone calls, and gas and electricity for your working area.
If your extra costs from working from home are more than the flat rate of £6, you can claim for the actual expenses on things like heating, electricity, water usage, and internet and phone costs. You’ll need to provide evidence with utility bills, receipts, and invoices, to show the exact increase in costs since you’ve been working from home, and you can only claim on internet and phone costs if they’re used exclusively for work.
But not everyone who works from home is eligible to claim expenses for their housing costs. If your employer has office space that you can work in, but you choose to work from home, or your employer already reimburses you for your working from home costs, or you are self-employed but you don’t have a designated work space in your home,
HOW CAN I REDUCE MY COSTS, IF I CAN’T CLAIM?
HEATING
Google searches for “work from home + reduce heating bill” up by 106%
As the weather gets colder, you might find yourself tempted to put on the heating. But as gas and electricity prices in England, Scotland, and Wales have recently risen by 10%, how can we keep the house warm without paying too much?
Ensure your home is correctly insulated to avoid heat being lost. Seal any gaps around doors and windows to prevent draughts coming in and heat escaping, and consider upgrading lost insulation.
Make sure you keep doors closed to any rooms that aren’t being used, so the heating doesn’t have to work so hard to warm more space than is necessary; for example, you could keep bedrooms cooler, as cooler bedrooms can improve your sleep, or you could turn off the radiator in the kitchen, as this room will naturally get warmer as you cook.
Keep your washing off your radiators – it might help it dry quicker than being outside in this weather, but it’ll block the heat from entering your room, and you’ll be tempted to turn the heat up even higher to compensate. Consider rearranging the furniture too, to make sure your bed or sofa isn’t blocking the warmth from circulating, by being pressed up against the radiator.
Around 18% of heat loss occurs through windows. Let the sunshine in whenever you can, as it will help warm the home, but make sure you close the curtains as soon as the sun goes down to add an extra layer of insulation, and stop the heat escaping through the glass – and ensure your curtains are the correct length, as heat will keep escaping if they’re not long enough.
Listen out for noises around the house that can be a sign that your heating isn’t working efficiently; a hissing sound can mean that you need to bleed your radiators, and your boiler turning itself off and on again repeatedly could mean it’s using more energy than is necessary to maintain the right temperature. Creaking floorboards might mean that there are gaps that are allowing a draught to come in, and this can cause you to use as much as 20% more energy than you need to, to keep the home warm.
COUNCIL TAX
Google searches for “work from home + reduce council tax” up by 109%
You might not be able to claim council tax as an expense when working from home, but there are ways you might be able to reduce your costs, with discounts you might be eligible for without knowing.
You can apply for a 25% discount on you council tax bill if you live alone, or if you’re the only adult in the home. If the household is on a low income, you might be eligible for Council Tax Reduction; the amount you can claim will depend on your income and savings, as well as the policy of the local council.
If you live with someone like a family member or a lodger – someone who isn’t your partner – you might qualify for a Second Adult Rebate, if they are on a low income or claiming benefits.
You can also ask to pay your bill over 12 months instead of the usual 10 – this won’t change how much you pay over the year, but it means you can have smaller monthly payments.
ELECTRICITY
Google searches for “work from home + reduce electric bill” up by 108%
Even if you can’t claim on your electricity bills, there are plenty of ways to reduce your costs, from switching to LED light bulbs, to making the most of natural lighting to reduce the need to turn the lights on, and making sure you turn off devices when they’re not in use. But there are other things that you might not have thought about – like when you make a cup of tea.
Overfilling the kettle means you’re using more energy than necessary, every time you make a tea or coffee, so fill up your mug from the tap and pour it into the kettle, so you’re only using the amount you need, and you’re not wasting energy. You can also reduce how much electricity the kettle uses by removing limescale buildup, which insulates the heating element and makes the kettle take more time and energy to boil.
The post Working From Home? Here’s What You Can Claim Back & Tips to Keep Bills Down first appeared on HR News.
