There is little doubt that the working from home phenomenon is well and truly established.
With a laptop, a phone and an internet connection, you can perform many tasks as adequately at home or elsewhere, as in an office.
While returning to the office is a must for many, recent rail strikes and fuel price surges have shown that flexibility can keep the wheels of the UK industry turning when businesses and their staff are disrupted.
Usually, this takes a hybrid form with a few days in the office and a couple working from home, or vice versa.
Although many organisation are already implementing this new way of working, there are things that business owners should consider.
Especially if you intend to operate your business out of your home.
Get advice before taking the plunge
If you decide to run your business from home, some rules and regulations need to be followed:
- You may need permission from the local council, a landlord or a mortgage provider to run your business
- Health and safety issues will also have to be properly managed
- You may need separate insurance.
Planning permission
If you are planning on making alterations to accommodate your business, you may need permission from the council.
You may also need a licence if your business is likely to disrupt others by deliveries and visitors, or if you want to advertise outside your home.
What tax allowances can you claim?
You can include your business costs in your Self-Assessment tax return if you’re a sole trader or part of a business partnership and you can also claim a proportion of the cost of things like council tax, heating, lighting, phone calls and broadband.
Capital Gains Tax
You may have to pay Capital Gains Tax on the part of your property used for your business if you sell your home in future, so be aware.
Business rates
You might need to pay business rates on the part of your property that you use for your business, while still having to pay Council Tax on the rest of your property.
But you may qualify for small business rate relief if your property has a rateable value of £12,000 or less.
Supporting employees in their own homes
Many employees enjoy the work-from-home benefits, either full-time or under a hybrid system.
As an employer, you must support them. For employees, the work-from-home relief, which many claimed during the pandemic, is still available.
Although from 6 April 2022, it is only open to employees when an employer specifically requires a staff member to work from home – for example, to stop the spread of Covid or because the job had been ‘relocated’ and is now contractually regarded 100% as a home-working role.
For basic-rate taxpayers, the relief is worth 20% of the £6 allowance – £1.20 a week – while for higher-rate taxpayers they could claim 40% of the £6 – £2.40 a week.
Over the year, this means that employees can reduce their tax bills by between £62.40 and £124.80 respectively.
For some employees, relief may also be available on:
- Reimbursement by employers for additional household expenses
- Provision of office equipment by employers
- Provision of computers for private use by employers
- Travel for necessary attendance.
Please seek advice if you need help with implementing a working from home policy or guidance on managing your business from your home. You can contact our team here.
Link: Working From Home
