|
The lifestyle benefits are clear. And employers are happy because office cost-savings can be extensive.
But if you do work from home, you should make sure you get the most out of the arrangement from a financial perspective. There are important insurance and tax implications you need to consider.
Tell your insurer
First, anyone who works from home, even if it is just taking a report home to finish, or if you are working from home while waiting for the dishwasher repair man to appear, should tell their domestic insurers. It may seem trivial but your cover could be invalidated if you fail to do so.
Most insurers will accept home working, involving say a computer, fax and printer, without adding extra cost, as long as they are told about it.
Insurers may draw the line at more specialist equipment. So a graphic designer with a non-standard computer, specialist software and high-resolution printers may need a specialist homeworker policy.
Are you covered?
It makes sense to check you have a policy that includes business interruption insurance, and public, product and employer liability, especially if you are self-employed.
If you run a full-blown business from home, then you will probably need a straightforward commercial insurance policy.
If the business equipment you use at home belongs to your employer, it should be insured by the employer.
Employers owe a duty of care to carry out a risk assessment of the home workplace.
|
|
If there is an accident connected with the home workplace, even if the worker uses their own equipment, the employer could be found liable, in the absence of an adequate risk assessment. There could also be contributory negligence on the part of the employee.
Tax write-offs
To be able to write off expenses against tax, employees working from home for all or part of the time need to be able to show that anyone doing the job would be expected to work in that way.
As long as it can be shown that people must work from home as part of the job, employers are allowed to give workers a nominal sum every week tax-free towards their household bills, to cover the extra cost of working from home.
Proof of spending is not required, but receipts may be needed to get tax-free reimbursement from the company for expenses such as telephone calls.
Remember, there is a potential tax liability if you use the work computer for your own purposes.
Claim limits
Employees and the self-employed alike should be aware, however, of the limits of what they should claim. A proportion of utility bills is fine, as is office equipment and furniture - in fact anything that you must have for your business. But beware of including items you would have to pay for even if you were not working from home, such as mortgage payments, council tax or buildings insurance. You could end up having to pay capital gains tax on the proportion of the gain relating to your office when you come to sell the house.
Levels, and bases of, and reliefs from taxation are subject to change.
|
