{"id":1059,"date":"2020-04-17T22:28:13","date_gmt":"2020-04-17T21:28:13","guid":{"rendered":"https:\/\/cloud9accountingteam.co.uk\/?p=1059"},"modified":"2020-04-17T22:28:13","modified_gmt":"2020-04-17T21:28:13","slug":"tax-free-payments-for-working-from-home","status":"publish","type":"post","link":"https:\/\/cloud9accountingteam.co.uk\/sk\/tax-free-payments-for-working-from-home\/","title":{"rendered":"Tax-Free Payments for Working From Home"},"content":{"rendered":"

Making tax-free payment to employees\u00a0 for working from home<\/strong><\/h4>\n

As a result of the Coronavirus (COVID-19) pandemic, many workers have been forced to work from home. While working from home saves the costs of commuting to the workplace and perhaps allows workers to adopt a more relaxed dress code, there are also costs associated with working at home. Workers may need to equip themselves with somewhere to work, and perhaps invest in furniture, equipment and stationery where this is not provided by the employer. Household bills are also likely to increase as a result of homeworking arrangements. (Keep reading more in our article Tax-Free Payments for Working From Home below)<\/p>\n

There are also tax implications to consider, both where the employer meets the additional costs and provides equipment etc., and also where the employee picks up the tab.<\/p>\n

Additional household expenses<\/strong><\/h4>\n

Household expenses may increase where an employee works from home \u2013 the costs of heating and lighting may rise, as may telephone, broadband and cleaning costs. The tax system recognises this and include an exemption that allows employers to reimburse tax-free reasonable additional household expenses incurred as a result of working from home. Household expenses are defined as \u2018expenses connected with the day-to-day running of the employee\u2019s home\u2019. For the exemption to apply, the employee must be working at home under \u2018homeworking arrangements\u2019. These are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of employment at home.<\/p>\n

The costs that can be reimbursed within the scope of the exemption include the additional costs of heating and lighting the work area and increased charges for internet use, home insurance or business telephone calls. Where working at home triggers a liability for business rates, the extra cost that this entails can be met within the terms of the exemption.<\/p>\n

The exemption does not apply to fixed costs which are the same regardless of whether the employee works at home or not, such as rent or mortgage interest. Likewise, expenses that put the employee in a position to work at home, such as the costs of setting up a home office, are not covered<\/p>\n

As regards the amount that can be reimbursed tax-free, the employer can meet the actual additional costs of working at home. However, these are likely to be difficult and time consuming to identify, and the effort is likely to be disproportionate to the amounts involved. Far simpler is to take advantage of the flat rate allowance which enables employers to pay homeworking employees \u00a36 per week tax free to cover additional household expenses. Prior to 6 April 2020, the tax-free amount was \u00a34 per week. On the downside, the amounts are not exactly generous and may not cover the additional costs in full.<\/p>\n

However, where an employer does not meet the cost of additional household expenses, the employee can only deduct expenses to the extent that they are wholly necessarily and exclusively incurred in performing the duties of the employment. There is no corresponding flat rate deduction for employees.<\/p>\n

Equipment and supplies<\/strong><\/h4>\n

A separate exemption removes any charge to tax where the employer provides the employee with \u2018accommodation, supplies or services\u2019 used by the employee in performing the duties of the employment. In a homeworking context, this may cover the cost of providing a computer and a printer, stationery and maybe a desk and chair. Private use does not jeopardise the availability of the exemption as long as it is not significant.<\/p>\n

Again, relief is only available to the employee for revenue costs that are wholly, exclusively and necessarily incurred \u2013 stationery costs may come into the category. There is no relief for capital expenditure met by the employee in order to facilitate working from home.<\/p>\n

 <\/p>\n

For similar articles apply here<\/strong><\/h4>\n

If you would like to continue read similar advice articles, please, apply here:\u00a0https:\/\/cloud9accounting.gr8.com<\/a>\u00a0.<\/p>\n

Contact us:\u00a0https:\/\/cloud9accountingteam.co.uk\/contact<\/a>\/<\/p>","protected":false},"excerpt":{"rendered":"

Making tax-free payment to employees\u00a0 for working from home As a result of the Coronavirus (COVID-19) pandemic, many workers have been forced to work from home. While working from home saves the costs of commuting to the workplace and perhaps allows workers to adopt a more relaxed dress code, there are also costs associated with […]<\/p>\n","protected":false},"author":7,"featured_media":1060,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_templately_pack_id":"","_templately_imported_at":"","_templately_source":"","_templately_import_session_id":"","site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\nTax-Free Payments for Working From Home -<\/title>\n<meta name=\"description\" content=\"s a result of the Coronavirus (COVID-19) pandemic, many workers have been forced to work from home. 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