Wednesday 3 August 2022 02:54 PM Could rising energy bills spell the end of working from home this winter? trends now

Wednesday 3 August 2022 02:54 PM Could rising energy bills spell the end of working from home this winter? trends now
Wednesday 3 August 2022 02:54 PM Could rising energy bills spell the end of working from home this winter? trends now

Wednesday 3 August 2022 02:54 PM Could rising energy bills spell the end of working from home this winter? trends now

How soaring energy bills could compare to the cost of commuting 

MONTHLY ENERGY BILL

£191 for gas and electricity if working from home in January

MONTHLY COMMUTING COSTS

LONDON BUS

Any journey: £69.30 (42 journeys at £1.65 each) - CHEAPER

LONDON UNDERGROUND

Zone 2 to Zone 1: £134.40 (42 journeys at £3.20 each) - CHEAPER Zone 3 to Zone 1: £151.20 (42 journeys at £3.60 each) - CHEAPER Zone 4 to Zone 1: £180.60 (42 journeys at £4.30 each) - CHEAPER Zone 5 to Zone 1: £210.00 (42 journeys at £5 each) - MORE EXPENSIVE Zone 6 to Zone 1: £231 (42 journeys at £5.50 each) - MORE EXPENSIVE

CAR

20 miles: £137.76 (42 journeys at £3.28 each) - CHEAPER 25 miles: £172.62 (42 journeys at £4.11 each) - CHEAPER 30 miles: £204.96 (42 journeys at £4.88 each) - MORE EXPENSIVE RAC mileage calculator used, based on 52.3mpg Ford Focus hatchback with petrol costing 191p a litre

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Millions of Britons opting to continue working from home after the pandemic are facing a difficult decision this winter with the cost of energy bills meaning it could be cheaper to be in the office.

Households across the UK have been warned of an annual energy bill in excess of £3,600 this winter, making it extremely expensive to heat and power properties.

Now, HR experts and council bosses say staff will consider whether to spend more days in the office in the colder months after the next price cap rise in October.

And Uswitch estimates households where people work from home will use an extra 25 per cent more electricity and 75 per cent more gas per day in winter.

Based on price cap forecasts, this adds up to a potential yearly increase of £686 per household over the winter period, including £191 in January alone for those on standard variable tariffs. The experts added that the cost would be £139 for November and £143 for December.

MailOnline has calculated that it would therefore be cheaper to go into the office during January for Londoners who work in Zone 1 but live as far out as Zone 4.

Looking specifically at January, there will be 21 working days, which means the cost of powering and heating your home in this month would be £9.10 every day.

Those commuting to work by bus in London would pay £69.30 a month, based on 42 journeys at £1.65 each.

Those commuting on Underground from Zone 2 to Zone 1 would pay £134.40 a month, based on 42 journeys at £3.20 each. Those travelling from further out in Zone 4 to Zone 1 would pay £180.60, based on 42 journeys at £4.30 each.

It is only when you get to Zone 5 that journeys into Zone 1 will be pricier than working from home – equating to £210 for the month, made up of 42 journeys at £5 each. From Zone 6, it would be £231 a month, that being 42 trips at £5.50 each.

Those commuting into London from further outside the capital are also unlikely to see any benefit in cost savings - with a monthly season ticket pricier in almost all cases. Taking the example of some commuter towns, Woking to London is £351.80 a month, Luton to London is £452.80 and Reading to London is £484.30.

If driving, the example of a 52.3mpg Ford Focus hatchback was used with petrol at 191p a litre. It would cost £6.56 a day or £137.76 a month for a 20-mile journey each day; £8.22 a day or £172.62 a month for a 25 miles; or £9.76 or £204.96 for 30 miles.

This means that those driving to work would possibly save money on not having to heat or power their homes while in the office, if their commute is under 30 miles.

Leeds City Council's director for resources Neil Evans said some of the authority's staff 'may actually decide it's cheaper to come in rather than heat their homes'.

And HR expert Sam Alsop-Hall said his colleagues have been discussing what to do, with one predicting his energy bills will be nearly £500 a month - 'more than my car'.

Others have suggested that community spaces could offer a warm base for those working remotely, which would be cheaper than heating lots of separate homes.

AVERAGE MONTHLY COST OF WORKING FROM HOME v GOING TO THE OFFICE Month Price cap at the time Average monthly home energy bill if working from the office Average monthly home energy bill if  working from home Difference Nov-22 £3,358* £391 £530 £139 Dec-22 £3,358* £407 £551 £143 Jan-23 £3,615* £492 £683 £191 Source: Uswitch.com. The working from home  bill was calculated based on using 25% more electricity and 75% more gas per working day. *Based on Cornwall Insights predictions from August 2, 2022. 

It comes as energy consultant Cornwall Insight said a regular gas and electricity bill in England, Wales and Scotland could reach £3,615 in the new year.

This is hundreds of pounds more than previous predictions, with Cornwall Insight predicting just last month that annual energy bills would typically rise to £3,244 from October and £3,363 from January.

Energy bills forecast to hit £3,615 as cost-of-living crisis worsens

Households across Britain have been warned they could face an annual energy bill in excess of £3,600 this winter.

Energy consultant Cornwall Insight said a regular gas and electricity bill in England, Wales and Scotland could reach £3,615 in the new year, which is hundreds of pounds more than previous predictions.

In May, the Government announced an energy costs support package - worth £400 per household - in response to predictions that bills would rise to £2,800 for the average household in October.

Last month, Cornwall Insight predicted that annual energy bills would typically rise to £3,244 from October and £3,363 from January, but circumstances have changed significantly since then.

The company told BBC Breakfast yesterday that such a bill is now likely to rise to £3,358 from October and £3,615 from January.

Cornwall Insight's principal consultant, Craig Lowrey, said surging gas prices and concerns about Russian supply had prompted the increase.

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The company estimated yesterday that such a bill is now likely to rise to £3,358 from October and £3,615 from January. 

In May, the Government announced an energy costs support package - worth £400 per household - in response to predictions that bills would rise to £2,800 for the average household in October. 

Mr Evans told a Leeds City Council scrutiny meeting last week that working from home in some form will probably stay permanently, reported the Yorkshire Evening Post.

But he added that while much of the workforce is still working remotely because of commuting costs, this could change from autumn when colder weather begins to take hold.

Mr Evans said: 'I've got lots of staff saying, 'Prove to me I need to come in'. I personally think there's a need for regular contact because of the quality of relationships between people, development of new staff and good supervision.

'We all need these things to be done in-person because it's quite difficult to do them remotely.

'But that challenge of showing those things are necessary is something staff are (asking for). People are now saying they're struggling with finances and the cost of transport.

'We may see more people come back in September and some people may actually decide it's cheaper to come in rather than heat their homes.'

Sam Alsop-Hall, chief strategy officer at Birmingham-based healthcare recruitment company Woodrow Mercer Healthcare, said he has heard colleagues including middle managers discussing energy bills and what impact this will have on working from home.

He told MailOnline: 'I've been leading teams for years, but this week is the first time I've heard a lunch time conversation about energy bills in the office.

'Even middle managers in our organisation seem alarmed and concerned about the increasing cost of energy and the next increase expected in October. One of our team predicts his energy bills will be close to £500 a month - 'more than my car'.'

 

He added that the company has office space in Birmingham city centre which is open 24/7 for employees, and he expects many staff will 'forgo the right to work from home this winter as they quickly weigh up the cost of fuel to get to work versus the cost of fuel to heat their homes'.

Can you still claim a tax relief on working from home? 

The Government has changed the rules on who can claim tax relief for working home. Here is the latest guidance taken directly from Gov.UK:

Working from home

You may be able to claim tax relief for additional household costs if you have to work at home for all or part of the week.

If you previously claimed tax relief when you worked from home because of coronavirus (COVID-19), you might no longer be eligible.

Who can claim tax relief

You can claim tax relief if you have to work from home, for example because: your job requires you to live far away from your office your employer does not have an office

Who cannot claim tax relief

You cannot claim tax relief if you choose to work from home. This includes if: 

your employment contract lets you work from home some or all of the time you work from home because of COVID-19 your employer has an office, but you cannot go there sometimes because it's full

What you can claim for

You can only claim for things to do with your work, such as:

business phone calls gas and electricity for your work area

You cannot claim for things that you use for both private and business use, such as rent or broadband access.

How much you can claim

You can either claim tax relief on:

£6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs the exact amount of extra costs you've incurred above the weekly amount - you'll need evidence such as receipts, bills or contracts

You'll get tax relief based on the rate at which you pay tax.

Example

If you pay the 20% basic rate of tax and claim tax relief on £6 a week, you would get £1.20 per week in tax relief (20% of £6).

You'll usually get tax relief through a change to your tax code.

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Samuel Mather-Holgate, an independent financial advisor at Mather and Murray Financial in Swindon, said that a 'flexible approach' will probably be the preferred option of most staff and employers.

He told MailOnline: 'Although energy bills at home are going through the roof, the cost of commuting and the time it adds on to your day are real bugbears.

'If you do work from home you can claim some money back from HMRC for the cost of heating your home. It will mean doing a self-assessment, the entitlement isn't overly generous, but with bills going up it will be more worthwhile. '

However, the working from home tax break that saw people able to claim tax relief worth up to £125 a year during the pandemic has now become harder to claim.

You can no longer claim it if you choose to work from home, such as if your employment

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