Covid-19 - Home Working & Expenses Archives - Grunberg & Co

New claims needed to continue receiving working from home tax relief

admin — Fri, 16 Apr 2021 09:36:31 +0000

Employees who are continuing to work from home as a result of the Coronavirus pandemic and whose expenses have not been reimbursed by their employers should make new claims to continue receiving working from home tax relief.
This is because claims made in the 2020-21 tax year, which ended on 5 April 2021, will not be carried over automatically to the current 2021-22 tax year.
The relief is intended to cover tax-deductible additional costs incurred by people working from home as a result of the pandemic, such as heating and metered water.
People can choose either to claim relief at a flat rate of £6 a week, which translates to weekly savings of £1.20 or £2.40 for basic and higher rate taxpayers respectively, without needing to submit evidence or they can claim for the actual costs incurred if these are above £6 a week.
Self-Assessment taxpayers can claim the relief on their Self-Assessment tax returns for 2021-22, while people who do not complete a Self-Assessment tax return can claim via gov.uk here.

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Government reinstates advice to work from home ‘if you can’

admin — Wed, 23 Sep 2020 14:53:25 +0000

The Prime Minister has reinstated the advice for people to work from home if they can, following an increase in the incidence of Coronavirus in recent weeks.
The advice, which was first issued in March 2020, was withdrawn at the beginning of August, with people encouraged to return to city centre offices as part of an effort to bolster businesses, such as shops, cafes and coffee shops that depend on trade from office workers.
Since then, many businesses have invested heavily in making offices COVID Secure, with changes to layouts, the introduction of screens, increased cleaning regimes and one-way systems amongst the measures introduced.
The Prime Minister underlined that people who cannot work from home, such as retail and construction workers, should continue to attend their places of work as usual.
The new guidance is expected to be in place for up to six months.

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What expenses are taxable when working from home?

admin — Tue, 31 Mar 2020 12:07:20 +0000

If any of your employees are working from home due to Coronavirus because your workplace has closed or you are following advice to self-isolate then you may be able to deduct some of the costs of home working as a taxable expense.
The rules around expenses and whether or not they are taxable differs depending on the type of equipment, service or supply used and so we have covered the main categories below:

Mobile phones and SIM cards (no restriction on private use)

If you provide a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable.

Broadband

If your employee already pays for broadband, then no additional expenses can be claimed, but if a broadband internet connection is needed to work from home and one is not already available, then the broadband fee can be reimbursed and is non-taxable.
The broadband must be provided primarily for business use and any private use must be limited.
Laptops, tablets, computers, and office supplies
Where any of these items are used for business purposes and not significant private use, these are non-taxable. Where an employee has brought office equipment or supplies and wishes to be reimbursed this is taxable and should be reported via PAYE Settlement Agreement.
Electricity or heating
Employees are entitled to a payment or reimbursement of up to £4 a week (increasing to £6 a week from 6 April 2020), which is non-taxable. This is intended to cover additional household expenses incurred when your employee is working from home.
Where a claim exceeds this amount then an employee should check with you beforehand to see if you will make these payments and you should keep receipts.
Employer-provided loans
A salary advance or loan to help your employee at a time of hardship counts as an employment-related loan. Those loans with a value less than £10,000 in a tax year are non-taxable.

Temporary accommodation

If your employee needs to self-isolate but cannot do so in their own home, you can reimburse hotel expenses and subsistence costs, these are taxable.
Use of a private vehicle for business
Employers can pay approved mileage allowance payments of 45p per mile up to 10,000 miles (25p per mile thereafter) free of tax and National Insurance contributions.
If you do not pay mileage allowance, your employee can claim tax relief through their Personal Tax Account.

Reporting expenses to HMRC

Any expenses or benefits which are related to Coronavirus can be reported via a PAYE Settlement Agreement, which will allow you to settle tax and National Insurance contributions on any expenses or benefits, even though the responsibility would usually be on your employee, or on both you and your employee. This applies to Coronavirus related items only, for example, a new desk can go onto a PAYE Settlement Agreement.
Where you are already including benefits in kind in your payroll reporting you can continue to report expenses and benefit this way, or they can be reported through P11D returns.
It is important to keep a record of all expenses claimed, although you do not have to report of every instance of private use to prove a claim for exemption.
Any non-taxable expenses or benefits should not be reported to HMRC.

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Working from home

admin — Mon, 30 Mar 2020 10:54:47 +0000

With the Government recommending that people work from home where possible, many businesses will have had employees working from home for the first time in recent weeks.
Amidst the logistics and practicalities of setting employees up to work from home, it could be easy to overlook the implications of increased home working for your business’ tax bill.
To help you navigate the various tax considerations, we have put together a short guide to the points you need to be aware of.
Equipment
For most office-based employees, the obvious piece of equipment they will need to be able to work from home is a computer.
However, equipment will not necessarily be limited to computer equipment and can also include stationery and consumables such as printer ink.
HM Revenue & Customs provides exemptions in respect of items and equipment provided to employees to enable them to carry out their jobs.
Provisions covered by the exemption include stationery, office furniture, office and workshop supplies, as well as computer equipment. The exemption may also extend to the provision of home telephone lines but only in circumstances where there is a clear business case for this.
Two further conditions need to be met for the exemptions to apply:

The provision must not be used significantly for private purposes by the employee or a member of the employee’s family; and
The provision must be provided solely for the employee to be able to carry out their duties and must not belong to one of the following excluded categories:

– Vehicles, boats and aircraft;
– Any construction, extension or alteration of the employee’s living accommodation, such as the installation of a loft conversion office space or a garden office.
Household costs
Clearly, there is a potential for employees to incur additional costs, such as heating and lighting.
The employer can reimburse these costs tax-free where there is a ‘homeworking arrangement’ between an employer and an employee and the employee must work at home under the terms of these arrangements.
A notable exception here is costs that are unaffected by whether or not an employee is working from home or not, like mortgage repayments or rental payments.
Similarly, the cost of existing broadband connections cannot be reimbursed tax-free, although new connections can be, where the employee does not already have a broadband connection.
Tax relief for employees working from home
In circumstances where the employer does not meet the additional costs of an employee working from home – such as heating, water and electricity – but requires the employee to work from home, it may be possible for the employee to claim tax relief in respect of these costs.
Expenses for both personal and business use are not eligible for tax relief.
Employees can use HMRC’s online tool to determine whether particular expenses would be eligible for tax relief. The tool can be viewed here.
Here to Help
The best way of ensuring that you can make the most of the various tax reliefs available is to ensure that there is a written agreement in place between you and the employee that can be provided as evidence to HMRC.
Contact us today for detailed advice, tailored to your specific circumstances.

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