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The overlooked cost of working from home...


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So it looks as though for more and more people, working from home indefinitely may be an option. Some people love the idea, others hate it. Some people complain about the additional costs that they will occur - having to pay for 24 hour heating in the winter and cooling in the summer (for those in warmer climates). Some people are complaining about extra electricity from running a computer during the day. Some cheapskates are even complaining about the loss of free coffee.

All these are perhaps noticeable costs - we can all see when our utility bills go up. Some employers are offering a work-from-home allowance, a nominal amount per month to reflect additional costs. The one thing I have never heard anybody complain about is the increased cost of housing - the square footage of your home that your employer has taken from you. Out of your limited space, your employer has taken anywhere between 10ft2 (small desk plus office chair), to an entire bedroom (100ft2?) if you need a dedicated private room for calls and quiet working. This either comes out of your current home, or will have to be considered for your new home (i.e. paying extra for office space that would otherwise have not been needed). I just find it strange how people moan like hell about a small additional cost, but seem to be ignoring this huge cost. 

An interesting thought. How much space have you given your employer. Perhaps you should charge them rent? 

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I think I'll have saved £10s of thousands from WFH by next March. Time spent on a train/tube/traffic jam with the awful people you would expect in those forms of transport adds up to over a month (of working days) of time that can be spent doing nice, or important, things. I value that at my hourly rate.

Then there's the season ticket/petrol/parking, very expensive, and then a load of incidental costs too. Coffees, lunches, beers etc.

I'll sort out the electric and other costs of WFH via my tax return. Can't let the government have my money for free can we 🙂

Edit. Average train fare is £3k a year, lunches for a frugal type two grand maybe, 1 hour of time per day at £20ph is £5k. £10k easily for a normal person.

Edited by Huggy
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I’ve been amazed by the moaning about utility costs post-WFH. People never stop going on about it and keep saying it’s their right to claim a whole £6 extra per week because Martin Lewis says so. 

They never mention the commuting costs, Costa, overpriced packaged lunch, or random after work beers that they’re now not spending on. This amounts to far more that the tax relief on £6 per week. 

On space at home: if WFH is confirmed permanent then anyone not tied to a city centre mortgage has the opportunity to move somewhere bigger, cheaper, and not artificially pumped owing to transport links or school catchment area. 

Edited by sammersmith
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Unless you live within a short walk of your office, then I would imagine WFH represents a huge benefit financially and in terms of work/life balance. Every day I WFH I save £10 on fuel, £2-3 on lunch and about 2 hours in travel time. I can work a bit longer and get the odd chore done. It’s great. 

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Now that I’m allowed again, I will work from the office until I’m told I can’t. I cannot stand working from home, and don’t think I could stand it long term even if I did have a lovely dedicated space (which I don’t).

I’m very happy to swallow the commute cost - and like someone said, I include my time in that calculation - for my sanity. 
 

If we were restricted to not visiting the office again, I’ll look into renting something for myself.

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I’ve been amazed by the moaning about utility costs post-WFH. People never stop going on about it and keep saying it’s their right to claim a whole £6 extra per week because Martin Lewis says so. 

They never mention the commuting costs, Costa, overpriced packaged lunch, or random after work beers that they’re now not spending on. This amounts to far more that the tax relief on £6 per week. 

On space at home: if WFH is confirmed permanent then anyone not tied to a city centre mortgage has the opportunity to move somewhere bigger, cheaper, and not artificially pumped owing to transport links or school catchment area. 

Quite.  We're ditching our rented London flat.  Its a short walk from the Central Line.  Trains every 2 mins at rush hour.  Well woop-di-doop.  Been in about 10 time since end of March.  Bit sad though, it'll save a lot of money but it was great to be in a leafy suburb near big green spaces yet 25 mins from the City.

The office space point is interesting.  I'll have some fun with the boss suggesting the re-direction of funds to WFH staff when the Firm starts cancelling leases.  Can't wait to see his face.  I am fairly senior pleb approaching retirement with no ambitions to rise further, so can afford to nibble the hand that feeds me.  Don't do this sort of stuff if you are new / looking for promotion!

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Quite.  We're ditching our rented London flat.  Its a short walk from the Central Line.  Trains every 2 mins at rush hour.  Well woop-di-doop.  Been in about 10 time since end of March.  Bit sad though, it'll save a lot of money but it was great to be in a leafy suburb near big green spaces yet 25 mins from the City.

The office space point is interesting.  I'll have some fun with the boss suggesting the re-direction of funds to WFH staff when the Firm starts cancelling leases.  Can't wait to see his face.  I am fairly senior pleb approaching retirement with no ambitions to rise further, so can afford to nibble the hand that feeds me.  Don't do this sort of stuff if you are new / looking for promotion!

WFH means must people have lower costs so not really justified, in the next round of recruitment do you not think they will look further afield like Mumbai, Manila, Minsk, Mandalay, where staff will accept a fraction of the wages of staff in the UK 

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WFH undoubtly saves money, but I am starting to suffer with it being every day. Living in a 2 up 2 down with a kid who is off nursery twice a week, makes it bloody hard to focus.

Particularly seeing it in the juniors and midlevels as well. They've lost all drive and appetite. Don't blame them though, half of them get out of bed walk 2m to their desk and then sit at a computer all day, walk 2m back to their bed. Sleep and repeat. 

 

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Can you actually do that?

Partner has been WFH since the 1980s (freelance translator). Sends all relevant bills (energy costs and the like) to the accountant who deducts a pecentage and submits it as expenses. Apparently the Inland Revenue allow a slice of these costs as business expenses if you WFH. No idea how much exactly but maybe somebody on HPC more knowledgable in these matters does. Also unsure how this would apply if you're a direct employee rather than self-employed.

Edited by Shrink Proof
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WFH means must people have lower costs so not really justified, in the next round of recruitment do you not think they will look further afield like Mumbai, Manila, Minsk, Mandalay, where staff will accept a fraction of the wages of staff in the UK 

Probably depends on the soft of company/sector/budiness you're in and what their existing global foot print is. Setting up a new legal entity in another country (with everything that entails) is obviously a big undertaking. 

Company I work for is global, and I'm always at risk of being outsourced/moved to another country anyway. Brexit on top is of course just adding to the risk (or we will become a very cheap operation in USD!). I'd say if WFH leads to happier employees, it will be a differentiator too right? So good businesses probably will keep offering/doing it. Interesting space.

 

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WFH undoubtly saves money, but I am starting to suffer with it being every day. Living in a 2 up 2 down with a kid who is off nursery twice a week, makes it bloody hard to focus.

Particularly seeing it in the juniors and midlevels as well. They've lost all drive and appetite. Don't blame them though, half of them get out of bed walk 2m to their desk and then sit at a computer all day, walk 2m back to their bed. Sleep and repeat. 

 

I know it's terrible, we have a 5 bed with a study for 4 of us, i have the study, the wife has a spare double room converted into a walk in wardrobe / dressing room with large office desk and sofa bed, custom built in 2017.  If i leave my study door open i can hear to wife working tapping away at a keyboard and endless zoom meetings, her laughing and chatting. 

Drives me crazy. And when the kids schools where shut, my god despite them being on the top floor with their own double bedrooms, desks and PC's, and shared large bathroom/shower, they where always badgering for food and complaining of being bored. 

And not being able to freely roam due to lockdown, terrible, in better weather I often took a stroll 75m up our 100m long garden, and sit alone in the 12 seater Rondarvel (with wifi and bluetooth stereo and beer fridge). 

Yes i know where you are coming from, COVID19 and lockdown and working from home takes such a toll on one. Cant wait for it to be over and i am alone all day with my thoughts, just dealing with my customers.

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WFH means must people have lower costs so not really justified, in the next round of recruitment do you not think they will look further afield like Mumbai, Manila, Minsk, Mandalay, where staff will accept a fraction of the wages of staff in the UK 

Depends if they can find people with the relevant skills? That’s not always a sure thing.

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Depends if they can find people with the relevant skills? That’s not always a sure thing.

I would employ UK staff i would have to if i had a physical office, if it was online then it would make no difference to me about where they are, then it would be can they do the job at the lowest cost, and that would be a third world country with much lower wages.

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Be wary of using your home for business.

 

You can claim a fixed monthly allowance for a home office with zero proof needed, via self assessment tax return. Its about £26 pcm i think.  I have claimed it since going self employed in 2018.

https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

 

 

 

Can you actually do that?

 

 

I'll sort out the electric and other costs of WFH via my tax return. Can't let the government have my money for free can we

If you use your home partially for business, you are liable for capital gains tax on the portion of the property used at the point of sale.

I figure that the tax man is as old as old father time himself and is happy to wait for your CGT tax bill.

https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f#:~:text=You generally won't need,out part of your property.

"Do I pay capital gains tax on property? If you sell a property in the UK, you may need to pay capital gains tax (CGT) on the profits you make. You generally won't need to pay the tax when selling your main home. However, you will usually face a CGT bill when selling a buy-to-let property or second home. You may also need to pay CGT if your home is partly used as a business premises, or you lease out part of your property. 

Read more: https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f - Which?"

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I would employ UK staff i would have to if i had a physical office, if it was online then it would make no difference to me about where they are, then it would be can they do the job at the lowest cost, and that would be a third world country with much lower wages.

If your employees do low skilled work then fair enough

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Unless you live within a short walk of your office, then I would imagine WFH represents a huge benefit financially and in terms of work/life balance. Every day I WFH I save £10 on fuel, £2-3 on lunch and about 2 hours in travel time. I can work a bit longer and get the odd chore done. It’s great. 

Are you copying my answer before I write it :) ....my position was having worked all over the North for almost 30 years with commutes and travel time added onto each day I came to hate it. The last 5 years I rang a diverse team across the country and whilst they worked in the field I was Head Office and worked from home because I was just on the phone and pc all day. 

It saved £6/8 a day on fuel (I had free parking under the building but other would then pay another £8 a day parking).  It got to the point that when I did travel I never claimed for mileage (unless a London type trip) because of the monies I was saving everyday. 

But the biggest saving was time.

My job was a long 9 to 5 role i.e. really it was 8am - 6pm (therefore 6:30am to 8:30pm with travel) with most evenings catching up.

However from home I was logged on at 7am, breakfast at 10am and all work done by 5:15pm (other than ad hoc disasters which were at least once a week). No chit chat, no interruptions but also no travel....

I went from finishing and getting home at 8pm to being home and done for 5:15pm ish....priceless. 

Even disaster days eg function disruption and million customers without access to accounts, regulator want to see evidence of XYZ etc turned from a 8pm finish then drive home to an 7:15 finish and home already.

My heating bills did go up and I lost the corner of a bedroom for my pc, headset and my multiscreen fetish (got to have 3 screens for emails, presentations and other work :) ). It was a spare bedroom so I do take the point if room is more cramped. 

 

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Be wary of using your home for business.

 

 

If you use your home partially for business, you are liable for capital gains tax on the portion of the property used at the point of sale.

I figure that the tax man is as old as old father time himself and is happy to wait for your CGT tax bill.

https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f#:~:text=You generally won't need,out part of your property.

"Do I pay capital gains tax on property? If you sell a property in the UK, you may need to pay capital gains tax (CGT) on the profits you make. You generally won't need to pay the tax when selling your main home. However, you will usually face a CGT bill when selling a buy-to-let property or second home. You may also need to pay CGT if your home is partly used as a business premises, or you lease out part of your property. 

Read more: https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f - Which?"

Good luck Mr. Taxman. Good  Luck. Cant think of an easier tax to evade TBH, house wont be sold for at least 40 years when we want to downsize, would have been "family home for a retired couple" for 20+ years at that point. We will take our chances , lol.

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Unless you live within a short walk of your office, then I would imagine WFH represents a huge benefit financially and in terms of work/life balance. Every day I WFH I save £10 on fuel, £2-3 on lunch and about 2 hours in travel time. I can work a bit longer and get the odd chore done. It’s great. 

I can see it offers a financial benefit in many situations (despite the business using peoples' houses for free office space), but I completely disagree that there's a work / life balance benefit. Mingling work and home like this is IMO a terrible idea. I'm a firm believe in keeping work and home distinct and separate, and after having had to work from home for a bit this year I hope to never have to again. Working nearby (under half an hour walking distance) is ideal I think.

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You can claim up to £6 per week tax free from your employer for working from home. If your employer wont pay you this you're allowed the tax relief on it instead, which amounts to £124.80 for a higher rate tax payer. 

It can be claimed annually and in one go via the Government Gateway. Have your passport and P60 to hand!

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Be wary of using your home for business.

 

 

If you use your home partially for business, you are liable for capital gains tax on the portion of the property used at the point of sale.

I figure that the tax man is as old as old father time himself and is happy to wait for your CGT tax bill.

https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f#:~:text=You generally won't need,out part of your property.

"Do I pay capital gains tax on property? If you sell a property in the UK, you may need to pay capital gains tax (CGT) on the profits you make. You generally won't need to pay the tax when selling your main home. However, you will usually face a CGT bill when selling a buy-to-let property or second home. You may also need to pay CGT if your home is partly used as a business premises, or you lease out part of your property. 

Read more: https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f - Which?"

I wonder if you sell for a loss, can you then use that to claim tax relief and get a huge refund?

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All these are perhaps noticeable costs - we can all see when our utility bills go up. Some employers are offering a work-from-home allowance, a nominal amount per month to reflect additional costs. The one thing I have never heard anybody complain about is the increased cost of housing - the square footage of your home that your employer has taken from you. Out of your limited space, your employer has taken anywhere between 10ft2 (small desk plus office chair), to an entire bedroom (100ft2?) if you need a dedicated private room for calls and quiet working. This either comes out of your current home, or will have to be considered for your new home (i.e. paying extra for office space that would otherwise have not been needed). I just find it strange how people moan like hell about a small additional cost, but seem to be ignoring this huge cost. 

It is not a huge cot at all.  The savings people make from not having to travel to work,many people have to wear suit at work which costs money pk,us dry cleaning.  The fact is a huge number of people would rather work from home than have to travel to a place of employment

 

An interesting thought. How much space have you given your employer. Perhaps you should charge them rent? 

My mate has a guy who had someone working for him where the company provide sandwiches paste etc at lunchtime.  He sent a e mail to the HR dept (a big company) asking for his lunch to be paid for while working at home and his electric bill.

My mate advised him that if he was not happy with the situation he was free to find another job. 

 

I've worked from home for years, yes there are real costs mainly utilities and square footage but in vast majority of cases, I would guess the net benefit is positive. Which is why it's so popular?

The voice of reason

 

They never mention the commuting costs, Costa, overpriced packaged lunch, or random after work beers that they’re now not spending on. This amounts to far more that the tax relief on £6 per week. 

Agree but it is beyond me why people may £2 plus for a coffee and £4 plus for a sandwich I take my own food.  

 

I think I'll have saved £10s of thousands from WFH by next March. Time spent on a train/tube/traffic jam with the awful people you would expect in those forms of transport adds up to over a month (of working days) of time that can be spent doing nice, or important, things. I value that at my hourly rate.

Then there's the season ticket/petrol/parking, very expensive, and then a load of incidental costs too. Coffees, lunches, beers etc.

Agree

 

On space at home: if WFH is confirmed permanent then anyone not tied to a city centre mortgage has the opportunity to move somewhere bigger, cheaper, and not artificially pumped owing to transport links or school catchment area. 

Which is exactly what is happening 

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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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