Expert’s advice on saving money whilst working from home
Expert advice on how to save money while working from home
A significant number of the nation’s employees will choose to work remotely for the foreseeable future, even if they aren’t required to. Over the last year and a half, millions of people across the globe have uncovered the pleasures of working from home, and aren’t quite ready to give it up. A lot of these pleasures manifest as the variety of ways you can cut costs whilst working remotely, but many don’t realise that these savings go further than their long-forgotten commute.
Darren Diamond, an associate of the tax specialists, Lawton Benjamin, has provided his insight into the multiple ways you can save money from the luxury of your home office.
Claim for office equipment
Whilst some employers may be incredibly generous with the equipment they provide to their home workers, many more will be unwilling to splash out on anything from a desk to a stapler. Fortunately, however, you may be able to claim tax relief on the essential equipment you purchase for yourself!
PAYE workers, who work remotely, can use the P87 form to claim tax relief – of up to £2,500 a year – at their rate on any home office necessities. This means that, if you pay 20% tax, you’ll receive that much relief, with higher-rate taxpayers receiving 40% relief. Further to this, should you use your own vehicle for work, you can claim for that too, providing your employer doesn’t pay expenses. This won’t include commuting to and from your place of work (something that doesn’t apply to remote workers, in any case), but it does include any travelling you need to do for work.
Request a home working allowance
It almost seems too good to be true, but yes, employees that work remotely are eligible to request that their employer provides an extra weekly allowance. Despite remote working saving us money in a variety of ways, our utility bills are likely to increase due to the fact we’re spending more time at home, and this home working allowance can really help to negate the increasing costs of electricity, gas and water.
The 2021 allowance is £6 per week, which will be paid tax-free. It’s worth noting, however, that you can’t request this home working allowance if you are already claiming for these expenses with a P87 form. Also, bear in mind that your payslip’s gross figure won’t change, as you will simply be paying £6 a week less tax.
Should you be interested in requesting a home working allowance, you can easily ask your employer to arrange it for you. As they are entitled to refuse (which is unlikely), you can always claim the tax relief yourself using the P87 form instead.
Find out what you can expense
There are many normal office activities that we take for granted in terms of expenditure, but once we start printing and posting things in a remote working environment, the cost certainly becomes quite clear! Thankfully, any costs like these should be covered by your employer.
Check what you can expense each month with your employer. Any materials you use, such as paper or envelopes, the cost of postage, even the costs associated with a work mobile phone, should be paid for by the company. Ultimately, if a purchase is exclusively for business use, it should be covered, but just make sure you keep all your receipts. Further to this, if you are paid hourly, make sure to include any time spent posting items or shopping for supplies.
Check your insurance policies
Since working remotely, you’re likely to find yourself driving a whole lot less. Perhaps you’re hardly driving at all. In this case, you may be entitled to alter your car insurance policy and pay a lower premium. Your car insurance company may even contact you directly to offer goodwill gestures. Money-back for their customers, for example.
With insurance in mind, it’s also crucial to scrutinize your home and contents insurance policy if you’re committed to remote working, to ensure you have all the cover you need. With new items in your home, such as phones or laptops, further cover may be needed.
Save on your energy usage
As previously mentioned, you may be able to claim a home working allowance to help cover the increasing costs of being at home for an extended period of time. With this only equating to £24 saved on tax per month, and research stating that household fuel bills may rise by around £45 per month when working remotely, it’s certainly worth doing what you can to save on your energy usage.
Anything from turning on the heating more frequently to simply boiling the kettle will raise the cost of your energy bills, and whilst these incremental costs may seem small, they will certainly add up. There are many ways you can keep these costs down, however, such as:
- Only heat the rooms you’re using
- Don’t leave your devices on standby – turn them off!
- Don’t boil a full kettle every time – only boil what you need
- Make use of natural light whenever you can and make sure to turn lights off when you’re not using them
- If you live alone or with a partner, consider getting a water meter
- Warm-up with an extra layer of clothing, rather than turning the heating on
- Simply turn your thermostat down by 1 degree
With many employers choosing to keep remote working as an option for their employees, post-lockdown, it’s certainly worth implementing any money-saving strategies you can!