Since the Government have told us all to work from home where possible, millions of employees across the country have had their lives turned upside down. And, whilst the self-employed regularly deduct household expenses from their turnover, the same cannot be said for employees. The rules are much stricter, but there are some statutory rights, so read on to find out more.
Alternatively, you can download the full guide here.
What are the weekly tax limits?
HMRC does not want you to know the exact amount of any additional costs incurred due to you working from home during the Coronavirus crisis, or any other time for that matter.
The Revenue will require no evidence to reimburse up to £6 a week during the coronavirus crisis (or £26 per month).
If you are reimbursed more than these figures, then you will require to keep a paper trail to show how your figure has been calculated. If you do not, additional tax and national insurance will be payable on the amount over the threshold.
For example, if you had to increase your mobile data plan, this would be rather easy to do.
What about if I am struggling?
Employers across the country will be feeling the effects of the coronavirus crisis, causing them to reduce staff hours and salaries when it’s possible to do so.
Employers that wish to support valued employees could provide a tax-free salary advance or a loan of up to £10,000 throughout the whole tax year.
What are the rules about homeworking?
Usually, if an employee is to regularly work from home, then this must be formally approved by the employer and written into the employment contract. Here, specific rules can provide tax relief for any extra expenses that may arise from working at home.
If working from home is sporadic, or not a necessity, HMRC will not provide tax relief to cover expenses, and it’s a difficult task to prove that you do! However, with the Government imposing lockdown measures, most employees are now likely to qualify for homeworking tax relief. However there has not yet been any specific guidance on this.
How do I report reimbursements?
When expenses are reimbursed to employees due to the restrictions of the coronavirus outbreak meaning that they must work from home, these will have to be reported through payroll or on a 911D form.
So, if your employer reimburses you for buying office equipment, it will have to be reported! However, if these have been provided directly, and private use is insignificant, then these don’t have to be reported.
Alternatively, you can download the full guide here –
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