Could long-term home working effect your finances?

Working from home tax relief

There’s a possibility that many workplaces may never return to office working, working from home on a long-term basis. A few leading technology firms have already said that their employees can continue home working even after the pandemic. Evidence suggests that many other firms and companies are thinking the same thing. So, how could long-term home working now and after the pandemic effect your finances?

Covid-19 fast-tracked an already established shift in the way we work, so that a few years worth of changes happened pretty much overnight.

The Chartered Institute of Personnel and Development recently conducted a survey, which concluded that the quantity of people working regularly from home has risen by over a third to 37%. This more than doubles the quantity pre-pandemic.

What’s more, companies think that the number of employees who work permanently from home full time will rise to 22% post-pandemic. Pre-pandemic, this figure was 9%.

This shift will have financial implications for those home-working. And, as usual, the good comes with the bad. Here are some things you should consider:

 

The effect on your home insurance costs

March 2020 saw a sudden, unexpected to the way work. Because of this, you might have overlooked the effect working from home long-term could have on the cost of your insurance. However, now the dust is settling, you should mention it to your home insurer.

Chances are your home will have an extra printer, laptop and tablet, valuables that should be covered by your home insurance policy. Remember that if this kit belongs to your employer, their insurance should protect it. It’s worth double checking before you add anything to your policy.

Lastly, if you’re working from home permanently and you are no longer using your car to commute, tell your insurer. You may be able to pay less on your premiums.

 

You can claim tax relief on expenses

On 6 April, the Chancellor of the Exchequer, Rishi Sunak raised the tax relief to £6 a week to cover any expenses and extra household bills caused by working at home. You may be able to claim this tax relief.

When there is a home working arrangement in place, an employer can pay a weekly tax free amount to its employees. If you think that your costs exceed this amount, you should check with your employer to see if they will make higher contributions.

This benefit will only be available if your employer specifically asked you to work from home. If you’re working from home voluntarily, you cannot claim this tax relief on your bills.

 

It might be harder to secure a pay rise

It’s now widely recognised that working from home needn’t have a detrimental effect on the quality of your work. However, there’s still quite a lot of doubt around the effects for employees who work from home and their ability to secure a pay rise or promotion.

When working from home, it can be difficult to keep relationships with colleagues and peers. There’s also a chance that employees who work from home permanently maybe overlooked for promotions in preference to those who still work in the office.

Showing your worth and the value of your efforts can be more difficult. Good communication is important to ensure you are not being overlooked. Try to communicate any new skills you have learnt and regularly show how your personal development is supporting you to do your job.

If you would like to discuss your personal finances, whether it be pensions, investments or assets, the Landmark Financial Planning are here for you. Please contact our friendly team here.

 


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