HMRC extend tax relief for working from home during the Coronavirus

Posted on 3rd April 2020 by Streets


Image to represent HMRC extend tax relief for working from home during the Coronavirus

Our recent news article talks through the detail of these rules:

https://www.streetsweb.co.uk/about/news/2020/mar/26/tax-relief-working-home/

However, recognising that many employees are now having to work from home during the coronavirus pandemic, HMRC have updated their website to provide guidance in this area; which expenses are taxable and which are not.

The updated guidance indicates that the £6 per week allowance, could be claimed by employees having to work from home due to the Coronavirus, acknowledging for many that there will be increased costs associated with working from home.

A link to the updated guidance is below:

https://www.gov.uk/guidance/check-which-expenses-are-taxable-if-your-employee-works-from-home-due-to-coronavirus-covid-19

This update outlines further rules associated with employees requiring mobile phones, broadband and IT equipment used in relation to work with their employer. 

The new guidance highlighting these rules recognises that many employees, who may not have worked from home previously or as extensively, are and will face additional costs. In particular such costs will include expenses like electricity, heating or broadband.

The working from home allowance which HMRC indicates is now available to those working from home due to the coronavirus, provides tax relief to employees of up to £4 a week (£6 a week from 6 April 2020). This is a non-taxable amount for the additional household expenses incurred when your employee is working from home. 

HMRC’s guidance suggests this amount can be paid or reimbursed by an employer, however it will be useful to get confirmation if an employer doesn’t make or reimburse such expenses, if an employee can make a claim through their self-assessment tax return or form P87 if an individual is not in self-assessment.

If the claim is above this amount, then an employee will need to:

  • check with you beforehand to see if you will make these payments
  • keep receipts

Any expenses or benefits which are related to coronavirus can be reported on your PAYE Settlement Agreement.

This means you can 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 the PAYE Settlement Agreement, but a new sofa cannot.

If you are currently payrolling benefits in kind, you may continue to report expenses and benefits through your payroll. You may also continue to report expenses and benefits through P11D returns.

As with much of the support the Government have put in place due to the coronavirus, this is a newly updated area of the HMRC manuals and we would suggest anyone wanting to make use of this additional relief, seeks professional advice from their business advisor to ensure they qualify.


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Is it time to reflect on the culture of your organisation?

Having been involved in recruitment interviews recently, in which seemingly all applicants asked what the culture of the organisation was like, it did give rise to reflection on the same and what is meant by culture and how it affects the success or otherwise of an organisation. Organisational ...


Class 4 NICs who is liable?

Most self-employed people are required to pay Class 4 National Insurance contributions (NICs) if their profits are £12,570 or more a year. Class 4 NIC rates for the tax year 2024-25 are 6% (2023-24: 9%) for chargeable profits between £12,570 and


Post Transaction Valuation Checks

A Post Transaction Valuation Check (PTVC) can be requested from HMRC for an individual to work out a capital gains tax liability or for companies to calculate corporation tax liability on chargeable gains. The request for a PTVC should be made using


You might also be interested in...