Tax & Accounting News

Use of home expenses claims

01/11/2005

HM Revenue & Customs in Tax Bulletin 79 have revised their interpretation of the expenses an employee can claim for use of home for employment purposes.

HMRC no longer accept that relief is available for a proportion of rent, mortgage costs, council tax, water rates or household insurance premiums, and state that the only costs which qualify are a proportion of gas and electricity costs, metered water usage and telephone or internet charges.

HMRC also intend to disallow claims where, for example, an employee has a choice whether or not to work at home.

Some aspects of the new interpretation, such as the non-deductibility of rent, are controversial and are likely to be challenged, both by taxpayers and professional bodies. As there has been no change in the legislation, we will continue to apply existing practice where we can see no reason for change.

 

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