Last year the Chancellor Rishi Sunak proposed increasing corporation tax rates such that companies with annual profits of over £250,000 would pay tax at 25%. Those with annual profits of less than £50,000 would continue to pay tax at 19% but a marginal tax rate of around 26.5% would apply on profits between £50,000 and £250,000.

The new Chancellor Kwasi Kwarteng has decided to keep the main rate of corporation tax at 19% at all profit levels. This will certainly keep corporation tax calculations simple and benefit profitable companies with higher profits.

Companies can currently claim a super deduction of 130% of the cost of new equipment purchased before April 2023. This deduction is likely to be modified or scrapped as it was introduced to encourage companies to invest before the corporation tax rate increased to 25%.  Instead businesses will be encouraged to claim under the annual investment allowance (AIA) which gives 100% relief for the cost of any qualifying equipment whether it was purchased new or second hand. The AIA can cover purchases totalling up to £1m per year and this cap will now be kept at that level indefinitely.

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There are now almost 10 million people who work from home and can benefit from the tax-free allowance of £6 per week (£26 per month) which their employer may choose to pay.

Employers can reimburse larger amounts to home-based employees if the employees can prove that their increased variable costs from working at home, including heating, exceed £6 per week.

If you do not receive a homeworking allowance and you are required to work at home by your employer, you can claim a tax deduction of £6 per week from HMRC. However you must have a homeworking agreement in place with your employer which sets out the conditions under which you work from home.

Where your extra costs of working at home are higher than £6 per week you can claim a deduction from HMRC for the actual additional costs. With electricity and gas bills climbing, the cost of heating a room to work in may well exceed £6 per week. HMRC may ask to see proof of those costs so keep the bills as evidence.

You can claim the homeworking deduction on your self-assessment tax return or by using the online form P87. Where a similar claim has been made in an earlier year you can renew that claim by phoning HMRC.
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I can help you calculate the additional costs of working at home.