Many end-clients require contractors to be at least partially on-site, but negotiating some time to work from home (WFH) is entirely feasible. Whether you provide services through an agency or directly to the end-client, it’s important to approach working from home with care.

Flexibility in working hours is one reason why many professionals choose contracting – but working from home can be a delicate subject even when you operate through your own limited company.

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How to approach working from home

It’s important to think carefully about how you handle working from home to maintain a good relationship with your end-client.

1. Look at your contract terms

Working from home may not be laid out in your contract – and it doesn’t necessarily have to be. With some skill and rapport, you can discuss the prospect casually with your end-client and still leave open the possibility of a contract renewal.

Working off-site is also a good way of showing that you are not under the end-client’s control, but you should also consider other factors of IR35 that may harm an ‘outside IR35’ arrangement – such as Supervision and Direction, Mutuality of Obligation and Right of Substitution.

Tips for negotiating WFH at contract stage:

• Be professional and courteous – remember that you are a business providing services to a company
• Make it clear that your deliverability will not change by working from home
• Illustrate how you have met other end-client’s objectives in the past while working from home
• Suggest that you would like working from home written into your contract for clarity; this could even help you illustrate an ‘outside IR35’ arrangement

The above points can be put into practice at any stage that you choose to speak to your end-client about working from home.

2. Assess your working circumstances

Many end-clients are reasonable with contractors working from home, especially if you don’t need to be present to do your job.

You can start to assess your working circumstances by answering these questions:

• What days aren’t I needed on-site?
• How important is it to me to work from home?
• How many days a week do I want to work from home, and how many days are realistic?
• How could the distance from my home to the site affect how the conversation may go?
• How could the need for equipment influence the client’s attitude about working from home? I.e. using out of office equipment to access end-client databases

Addressing these questions in addition to your contractual terms will help frame your conversation with the end-client.

3. Discuss working from home with your end-client

It may be best to agree when to work from home from the start or after you’ve been on-site for a few weeks, depending on your circumstances and the end-client.

You should always have a discussion rather than turn up on day one assuming you will work from home three days per week. This type of practice will only burn bridges with your end-client and start you off on the wrong foot.

4. Build a rapport with your end-client on-site

Building a rapport with your end-client should be priority number one. A positive end-client relationship can increase the chances of working from home and help you secure a future contract renewal.

You may consider a compromise where you work fully on-site for the first few weeks and then integrate working from home. Many contractors find this helps them develop a good reputation with their end-client, making it easier to work flexibly.

Working from home can nurture a good work-life balance, decrease commuting costs and give you more free time. When approached sensitively and astutely, arranging to work from home with your end-client can be done without much difficulty.

Claiming expenses when working from home

The easiest way to claim expenses when operating your business from home is by using HMRC’s allowance of a flat £4 per week, or up to £208 per year. You can claim this as a non-benefit in-kind expense and receive a 19% Corporation Tax saving.

You are not required to keep receipts to claim the expense.

Unfortunately, as a limited company director you cannot claim a proportion of your rent, mortgage or council tax as an expense due to working from home. You can claim a portion of these as a sole trader, but bear in mind that there are disadvantages to being a sole trader. Contact us for more information on your business options.

Other expenses incurred by working from home

Business phone calls – if your business phone contract is in your company name, you can gain tax relief on the cost of using the mobile phone as long as it’s for business purposes. You might be more likely to use a business mobile while working from home, so keep this in mind.

Are you new to contracting?

If you’re new to contracting, learning how to properly approach a new end-client about working from home can be daunting – but it will come with experience.

If you’d like more information on moving from permanent employment to contracting, download our guide on finding new contracts. Contact us on 01707 871622 if you have questions about our accountancy service.

You can also work out your potential take home pay by using our contractor calculator below. Get a personalised quote for a more specific breakdown.

* Calculator for illustration purposes only and uses assumptions. Limited figures based on 52 weeks, expenses £50 per week, £9,100 salary and accountancy fees included. As of 1st April 2023, there is no longer a single rate of Corporation Tax. The calculator uses assumptions and estimates and is designed to be accurate by individual circumstances will vary. Umbrella figures based on 52 weeks, £15 per week margin and holiday pay paid out. For a more accurate calculation tailored to your requirements, please contact Churchill Knight today by calling 01707 871 622 or contact us here.