Working from home

Working from home

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Hello

I am looking through some excellent articles posted on AWeb on the expenditure that is allowable when working from home.

I work from home by arrangement with my employer, quite regularly.

I have purchased:

1. A laptop table, which will be primarily used for 'employment' work.

2. A printer, copier scanner, which is 40% work, 40% self employed use, and 20% private use.

Can my employer reimburse me, claim the above as expenses in its ct comp and avoid a tax or NIC charge on me? I did  sense from my review of the articles that reimbursed expenses do not 'count', and the equipment must be provided by the employer. This seems inequitable to me, as surely I am just purchasing a 'wholly and exclusively allowable item' on behalf of my employer?

Many thanks in advance.

SA 

Replies (4)

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By Steve Kesby
23rd Aug 2012 12:02

That's capital expenditure!

If you buy it personally for use in your employment (at least to an extent), then you can claim capital allowances on it (to that extent).

If you buy it on behalf of your employer who reimburses you for it, then the employer is providing you with an asset. A 20% pa benefit arises, if you use the asset for the purposes of your employer's business and any other use is not significant, the benefit is exempt.  Otherwise you can make an expense claim for that part of the benefit that is attributable to business use under S.365 ITEPA 2003.

Reimbursed "homeworking" expenses only applies to additional expenses "connected with the day to day running of the employee's home" (S.316A(3) ITEPA 2003).

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Replying to North East Accountant:
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By Towards excellence
23rd Aug 2012 12:21

Thanks a lot Steve.

Of course you're right that these are capital items, but as the cost is small, can tax not follow accounts and the items be treated as revenue (repairs and renewals)?

Secondly, 40% is significant, so should I apply S365? I have looked at S365, and am not sure whether this requires that I claim it on my tax return as a deductible  from my employment income (as capital allowances or full deduction of employment related proportion). Could you please clarify further?

Thanks again

SA

 

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By Steve Kesby
23rd Aug 2012 12:39

Yes, but

If the employer owns the equipment, then they might choose to write the expense off as revenue, and HMRC probably wouldn't object for trivial expenditure (particularly where AIA might otherwise apply).

If the employee owns it and provides it to you though, there's a benefit, whether it's a workshirt or an aircraft carrier.

My main point was that it can't qualify as homeworker's additional householder's expenses.

If you own it though, you can claim capital allowances (including AIA).

So if you spend £1,000, and your employer makes a contribution (taxable) for the employment element of £400, you're able to make an AIA claim for £400 to offset it.

Both the capital allowances claim and a S.365 claim would need to go through your Tax Return, and I don't think you get relief for NIC purposes either way.

The least cost way for NIC purposes is employer buys asset, gives it to you with BIK (no NIC for you, Class 1A on whole amount for employer), you claim your 40% under S.365 for tax purposes.

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Replying to shaun king:
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By Towards excellence
23rd Aug 2012 15:12

Thank you, I am grateful for your input.

SA

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