Tax benefits of working from home?

Tax benefits of working from home?

Given that a large proportion of the workforce are homeworking/working from home we thought we'd look into whether there were any tax benefits that might arise during this difficult time:

Expenses

Employees may suffer additional household costs such as heating/electricity etc as a result of working from home due to self-isolation or the closure of the workplace.

If your employees need to work from home they will not be taxed on amounts you reimburse them for these additional expenses. No receipts or records are required and no reports need to be made to HMRC on amounts reimbursed of up to £6 per week (£4 per week up to 5 April 2020).

However, any excess costs claimed by employees over these weekly limits must be substantiated with receipts or calculations e.g. itemised telephone bills and fuel bills demonstrating increased usage. If the employer is not provided with proof that the expenses exceed the weekly limits, any payment over these weekly limits will be treated as earnings and subjected to tax and NIC through the payroll.

These exemptions only apply to payments made by employers and more complex rules apply where the employee incurs these costs without reimbursement and wishes to claim tax relief. If you require more guidance on this please make contact.

Equipment used at home by employees

No tax or NIC will be due on equipment or furniture provided to employees whilst home working where these are provided for the sole purpose of enabling the employee to perform their employment duties and any private use of these items is not significant.

An employer-owned mobile phone provided for the employee’s use will not give rise to a taxable benefit or income even if private use is permitted but any private use will be taxable if the employer pays for the employee’s own phone.

No additional relief is available where the employee already has broadband in place but where it is necessary to provide a new broadband connection to allow the employee to work from home, there will be no tax on reimbursement of the business element.

These might be small amounts, but i'm sure in these strange times all help is gratefully received Stay safe