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As the battle with Covid-19 continues many businesses will once again be closing offices or keeping staff presence to a minimum. As the government advises us to be working from home during coronavirus tax implications may be paramount. Here are some tips to ensure you recoup the costs.

Most employees working from home will incur extra expenses. Costs associated with home working should be reimbursed by their employer. However, if this does not happen, for employees working from home during coronavirus tax can be claimed back. You can go direct to HM Revenue & Customs and claim back these non-taxable expenses.

Working from home during coronavirus tax to claim

Various rules – for employers and employees – dictate what can be claimed. The key point is to set out homeworking in a formal arrangement. If working from home is agreed and employees do so regularly, the claims process is simple.

Household utility costs

Employees are entitled to a basic amount of £6.00 per week or £26.00 per month. This is free of tax and National Insurance and should be paid by the employer. Alternatively, people can claim it directly from HMRC.

 

This amount covers extra heating, lighting and water costs for people working from home during coronavirus up to five days a week.  There is no need to keep records if the employee does work from home and an agreement is in place.

 

Paying more

An employer may choose to pay a higher sum. If so, for this amount to remain tax free both employer and employee must demonstrate that it covers only those additional costs the employee incurs by working from home.

 

Telephone calls you can claim during Covid-19

The allowance does not include business calls made from an employee’s personal mobile or home telephone. Workers can claim the cost of the calls, but not line rental, as an additional amount.

 

Alternatively, businesses can choose to provide their workforce with a company mobile phone. No private use restriction should apply. When working from home during coronavirus tax wise this is a good option as neither employer nor employee will incur tax or National Insurance costs.

 

Where broadband is already installed at their home address, employees can make no additional claim for using it.

Office equipment expenses you can claim

Typically, to do their job at home, employees will need office equipment. Businesses can opt to provide SIM cards, office supplies, smart devices and computers, for example. So long as private use of these items is insignificant, there is no tax or National Insurance liability for either employer or employee.

 

A worker may buy the office equipment themselves. In this case the employer is permitted to refund the cost without it being subject to tax or National Insurance.

 

If you need advice on any aspect of working from home during coronavirus tax -wise, contact us on 01785 243276.

 

More advice on working from home during coronavirus

Advice on working from home from ACAS

 

You might also be interested in reading these pieces about support available during coronavirus:

https://www.howardsca.co.uk/new-local-lockdown-finance-available/

 

https://www.howardsca.co.uk/new-grants-available-in-staffordshire/

 

https://www.howardsca.co.uk/20m-support-for-smes-to-bounce-back-from-covid/