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        Working from home: The real expense

        Working from home: The real expense

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          24-Nov-jacoblund-via-iStock-1

          Many people have been working from home since the start of the Covid-19 pandemic in March 2020.

          Despite restrictions having been lifted, a government survey in January revealed 36% of UK residents were continuing to work from home, rather than returning to the office.

          Before the first lockdown began two years ago, around 70% of the British workforce had never worked from home, according to the Office for National Statistics. Previously, homeworking was most common in the IT sector, where around half of all employees had worked remotely at some point.

          For most of the UK’s 32.6 million-strong workforce, going to their place of work every day was commonplace. However, the lockdowns changed all this. By April 2020, almost 47% of people had worked from home – an increase of 17% in less than a month. The vast majority said they had done so as a direct result of the pandemic.

          Official figures released in May 2021 showed that the number of homeworkers had more than doubled in the past year. The unprecedented public health emergency sparked fierce debates over the whole future of the workplace.

          Why are people still working from home?

          Today, research shows many people are still working from home, at least some of the time. Even though the majority of offices have now reopened, many workplaces have adopted a hybrid working pattern.

          Only 38% say their office is still closed, so they have no choice. There is growing evidence that a number of businesses have downsized over the past two years, due to financial struggles. This has left some employees having to work from their own homes.

          How many self-employed people work from home?

          Self-employed individuals have been impacted most by the pandemic. There were 4.52 million self-employed people in the UK, as of August 2020. During the pandemic, there have been 2.3 million claims for financial aid.

          Today, the number of self-employed has dropped by 800,000 since the start of the pandemic. Professional, technical and scientific roles are the most popular industries for self-employed people in 2022. This is the biggest sector where home working has become the norm in the past two years, with 97% of those surveyed having done so at some time since March 2020. In the past 12 months, 87% have worked remotely at some point, according to research from IPSE.

          How does home working affect living expenses?

          While some believe working from home is cheaper than commuting to the office, the recent increases in utility bills and other living expenses are impacting home workers.

          Research by the Office for National Statistics reveals 82% of home workers have reported significant increases in utility bills, while 24% have experienced a rise in internet bills. While half said they were spending less on petrol due to staying at home, this was now being offset by the rising cost of living.

          Across the UK, energy bills went up by 54% on 1st April 2022, an average of £693 a year for most households, as a result of the price cap increase. This means the average annual bill will be around £1,971.

          In addition, 33% of home workers said they had spent more on food due to working from home. Food prices are also increasing due to the general economic climate and a high inflation rate.

          Can you claim expenses for working from home?

          You can only claim some expenses if you work from home as a self-employed person. There are a number of remote working-related business expenses including a proportion of your internet and telephone bills, gas and electricity bills, water rates, council tax and rent and mortgage interest costs.

          You can claim only the costs associated with your business expenses such as lighting and electricity for your home office space, business calls and business internet use. You must work out how much is business and how much is personal use, as you can’t make a blanket claim for all your bills.

          As a PAYE worker there is a very small tax rebate available if you have spent even one day working from home during a tax year, other than that, as a homeworker, the rising cost of working from home falls on the shoulders of the employee rather than the employer.

           

          © Artie Medvedev / Shutterstock.com &  jacoblund via iStock

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