SE32760 - Other expenses: home: working from home

Modern technology allows increasing numbers of employees to carry out some or all of the duties of their employment in their own homes. Where we accept that an employee's home is a workplace we can permit a deduction from emoluments for

• household expenses, see SE32810
• in some cases, for the cost of travel from home to another workplace, see SE32370.

This page and the pages that follow contain guidance on how to decide whether an employee's home is a workplace and, if it is, what expenses can be deducted.

Before a deduction can be permitted for a household expense it must be demonstrated that the expense has been incurred wholly, exclusively and necessarily in the performance of the duties of the employment, see SE31630 and SE31660. Those are the statutory conditions imposed by Section 198 ICTA 1988. HMRC accept that those conditions are met where the following circumstances apply:

• the duties that the employee performs at home are substantive duties of the employment. “Substantive duties” are duties that an employee has to carry out and that represent all or part of the central duties of the employment (see SE32780)
• those duties cannot be performed without the use of appropriate facilities
• no such appropriate facilities are available to the employee on the employer’s premises (or the nature of the job requires the employee to live so far from the employer’s premises that it is unreasonable to expect him or her to travel to those premises on a daily basis)
• at no time either before or after the employment contract is drawn up is the employee able to choose between working at the employer’s premises or elsewhere.

The examples in SE32790 illustrate how those conditions will apply in a range of different circumstances.

If one or more of those conditions is not met it is likely that the employee will not satisfy the statutory tests in Section 198. However, employees do of course have the right to appeal to the Commissioners if they believe that they satisfy the statutory conditions. Any case where agreement cannot be reached can be brought before the Commissioners as described in SE31706.

Cases of significant doubt or difficulty can be submitted to the Employment Income Technical, in the manner described in ADM6.109. You should also submit any case where you propose to accept that an employee's home is a place of work and it appears likely that a large number of other employees will be able to show that their circumstances are comparable with those of that employee.