Tax Relief for Home Working
Some changes came in from 6th April 2020 raising the amount of tax relief that can be claimed for homeworking where required from £4 to £6 per week. With the coronavirus pandemic many employees will have taken advantage of this but not everyone may be aware of this benefit.
Employees can go to the HMRC website and check if they can claim here.
Employees can also claim for additional costs specifically rather than the flat amount but they will need to keep evidence such as bills or receipts.
“If you provide equipment, services and supplies to an employee who works from home, you do not have to report or pay anything if they’re only used for business purposes, or any private use is insignificant.”
From gov.uk website
The employer can also cover the costs of the additional expenses as long as the payments are within the weekly limits and less than the amount of additional household expense:
- £6 per week
- £26 per month for monthly paid employees
If expenses provided are for both private and business use a P11D would be required and Class 1A National Insurance would be due. If the payments are above the limits then there are extra steps you will need to take and there may be tax and National Insurance due for the additional money.
If employees do have to work from home there are options for the employee to claim some tax relief. Employers can provide equipment and make payments directly instead of the employee claiming the relief but records should be kept. There are rules to follow but for the majority of cases these should be straightforward.