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Another six months working from home: Expenses, benefits and insurance must knows

Paloma Kubiak
Written By:
Paloma Kubiak

The government has changed its message on working from home, with those who can, encouraged to do so. Here’s what you need to know about expenses, benefits, insurance and broadband.

After lockdown was eased, staff were encouraged to head back to their workplaces. But as coronavirus cases have surged in the last few weeks, the Prime Minister, Boris Johnson, yesterday announced tougher restrictions in England to curb its spread.

Speaking in the Commons, Johnson said: “We must take action to suppress the disease.

“We are once again asking office workers who can work from home to do so. In key public services – and in all professions where homeworking is not possible, such as construction or retail – people should continue to attend their workplaces.”

He added that unless we “palpably make progress, we should assume that the restrictions will remain in place for perhaps six months”.

With a possible six months of working from home, we list what you need to know in terms of expenses, benefits and insurance.

Work from home expenses

You may be eligible to claim £6 a week to help cover the expense of working from home such as for extra electricity and heating via a little-known income tax relief offered by the government: P87.

Employees who are required to work from home have always been able to claim tax relief or expenses incurred as part of their employment so this isn’t something new introduced due to the coronavirus crisis.

There are three ways to claim:

  • Through your employer as a non-taxable benefit. This can be done via your usual expense claim which means cash will usually be paid straight to your bank account and without tax being deducted.
  • Through HMRC and the usual self-assessment. Here you can claim tax relief on the up to £6 a week cost. This can be worth £1.20 a week at 20% tax or £2.40 a week at the higher rate. For those who normally do a self-assessment form, you can claim on it.
  • For others, you’ll need fill out the online P87 form through your Government Gateway account or by filling out a postal P87 form.

See YourMoney.com’s How to claim back the expense of working from home for more information.

Home office equipment

Employees working from home due to coronavirus will be exempt from paying income tax and Class 1 National Insurance on newly-purchased home office equipment. This includes equipment deemed “necessary” for the employee to work from home such as a laptop, corner desk or necessary computer accessories.

This exemption lasts until the end of the tax year – 5 April 2021 and means employers will no longer need to report the reimbursed expense which would normally be liable to tax and NI contributions.

This is to make it easier for employees to gain access to equipment and remain productive as they work from home.

See YourMoney.com’s Tax break for home office equipment for more information.

Access to Work scheme

Disabled workers or those have a physical or mental health condition that makes it hard to do their job, can get a grant worth up to £60,000 to help them work from home under the government’s Access to Work scheme.

The grant is to buy specialist equipment, such as a screen reader, video remote interpreting or support worker services. It can also be used to cover taxi fares and public transport costs.

Previously, the money could only be used for support in the workplace or in getting to the office but it was extended to help those working from home.

Last year, it provided personalised support to 36,000 people with disabilities and health conditions to do their job.

You can apply for funding online at gov.uk/access-to-work or over the phone on 0800 121 7479.

See YourMoney.com’s Access to Work scheme now covers working from home for more information.

London Weighting

With workers now staying put at home, you may wonder whether your employer can cut the London Weighting allowance of your pay which typically adds around £4,000 to salaries.

Kate Palmer, associate director of advisory at Peninsula, says London-based employers may look to cut or remove this element to save costs. Unlike the National Minimum Wage, there’s no single body that sets the rate so Palmer says for businesses that do offer this element of pay, “it’s entirely up to them if they seek to reduce it, and how much they should do this by”.

Removing London Weighting from an employee’s wage would technically represent a change in the terms and conditions of their contract, unless there’s a specific term allowing the employer to make such a change. Agreement to alter the terms may need to be sought.

See YourMoney.com’s London Weighting: ‘Can my employer cut the perk as I’m working from home?’ for more information.

Car and home insurance

As we’re spending more time at home rather than on the roads, commuting or in the workplace, you should check what this means for your car and home insurance policies.

When it comes to car insurance, a number of big providers have offered customers a partial refund, for instance where they’re driving less than the annual mileage given or as they’re no longer commuting via the car. For others, claims have fallen which means insurers may share the savings with customers.

With home insurance, you usually need to tell your insurer of any changes to the usual use of your property. Working from home may be one of them.

However last month, members of the Association of British Insurers (ABI) confirmed that where office-based workers continue to work from home, they won’t need to contact the provider to update or extend their cover. This is in place until at least 31 October.


A fast and reliable broadband connection at home is vital for those who need to work from their properties.

But with the increased demand, there’s added pressure on networks which could affect the speed or connectivity.

See YourMoney.com’s guide on Your rights if you’re fed up with slow or patchy broadband for more information.