Expenses you can claim working from home.
With the outbreak of coronavirus, many businesses have been advised to work from home if they can. For others, working at home has become a norm due to self-isolation or shielding measures as advised by NHS because they are at severe risk of illness or have an underlying condition. The government has outlined expenses that can be claimed during this period for those who have been relegated to working from home.
Telephone, Broadbands and Laptops
Mobile phones are allowable expenses even though it may be used for private use if it is restricted to one phone per employee.
If the employer pays for the broadband for the employee, it cannot be claimed however if a broadband was installed for the sole purpose of working from home, and it was not available before, the cost can be reimbursed and it is an allowable expense. It is important to note that private use of the broadband must be restricted.
Laptops, office equipment and computers used for the sole purpose of the business are also allowed.
Reimbursement for expenses
If purchases were required by the employee to ensure that they were equipped to work from home, it is not taxable if you reimburse them for the actual cost of the purchase. If the employee was not reimbursed, they can claim tax relief for the purchase on their tax return or P87 only if the purchase was necessary for their work and was made entirely for business use.
It is important to keep accurate records of the purchase to be able to claim the exact amount.
Return of office equipment given by employer or reimbursed by employer
It is important to note that supplying the employee with office equipment to enable them work from home is tax free if the equipment is returned to the employer and if ownership was not transferred to the employee. If there was a transfer of ownership, it raises a taxable employment benefit, and this will be based on the market value of equipment at the time of transfer of ownership.
However if the employer reimburses the employee for the cost of office supplies needed to work from home and there is no agreement to transfer the ownership back to the employer, there will not be a taxable benefit charge on the reimbursement.
Electricity, heating and other expenses
Employers can reimburse their employees up to £4 a week (£6 a week for expenses dated after 6 April 2020) for additional household expenses as a result of working from home and this will be non-taxable. It is important to note that the employee must check if they will be reimbursed by their employers and keep diligent records (receipts) to make these claims.
Employer loans
Loans or salaries in advances less than £10,000 to assist employees get by during these times will be considered an employment-related loan. They can be interest free or below the official rate set by HMRC.
Temporary accommodation
If an employer needs self-isolate due to coronavirus and is unable to in their home, the employer can reimburse the cost of the accommodation.
Use of employee’s vehicle for business
Mileage allowance of £0.45 per mile of the first 10,000 miles and £0.25 per mile for the subsequent miles can be paid by the employer, however if mileage allowance is not given, the employee can make a claim through their personal tax account
If you need advice regarding the information above, please contact us on 01279 772966 or send us a message at info@senigukconsulting.co.uk.
