ATT Technical Officer The Association of Taxation Technicians
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Helen Thornley updated article

Coronavirus: Tax reliefs to support homeworking

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Helen Thornley explores what tax reliefs are available to support employees who are required to work at home, including the change annouced on 13 May for tax relief on the cost of home office equipment.

 

13th May 2020
ATT Technical Officer The Association of Taxation Technicians
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Homeworking allowance

The homeworking allowance was increased at the Spring Budget from £4 to £6 a week (or £26 a month) with effect from 6 April 2020. An employer can pay this fixed sum, tax-free and NIC-free, to meet the additional costs an employee incurs working at home under homeworking arrangements.

Homeworking arrangements mean an agreement between the employer and employee (ideally in writing) under which the employee works at home regularly as part of their job, not just informally at weekends or evenings.

During the coronavirus pandemic, HMRC will accept that employees working from home because their employer’s offices have closed - or because the employee is following advice to self-isolate - meet these requirements. Newly home-based employees will be eligible to receive the allowance tax free from the date that their employer agreed they could work from home, or from when government advice was announced.

An employer can pay more than £6 a week, provided there is evidence to support the additional costs incurred. Otherwise any excess will be subject to income tax and NIC. The alternative of an employer agreeing a bespoke scale rate with HMRC is currently improbable.

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Replies (6)

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FirstTab
By FirstTab
15th Apr 2020 16:12

Please keep the articles of this nature coming. Thank you.

Thanks (4)
By SteveHa
16th Apr 2020 08:30

Quote:
but we haven’t seen definitive confirmation that HMRC will accept that the further condition of lack of choice over working arrangements has been met.

Surely Government guidance itself ("Stay at Home") is sufficient to remove any choice over working arrangements. In fact the only choice is work from home or don't work at all.

Thanks (2)
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By Sanjeev Nanda
16th Apr 2020 10:23

I agree that although this "working from home" scenario has hit all of us like a truck, the framework has been ill-implemented, at best. I saw during a TV debate, the participants were asked whether the internet charges should be reimbursed by the company? The panel was dead silent for a moment, and then ablaze with uproarious indecision the next. The fact of the matter is that the nuance has been ignored a great deal, while being focused on the bigger picture in total. It is really the details that the devil resides in.
~Sanjeev Nanda

Thanks (0)
Replying to Sanjeev Nanda:
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By mail.taxperfect.co.uk
16th Apr 2020 14:28

And playing Devil's Advocate for a moment, will there be a proportion of capital gains not covered by PRR where a room has been exclusively set aside at home for non-private purposes? A highly unlikely scenario, but you never know....

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By Steve Bower
16th Apr 2020 11:08

Unless of course you are an MP, when a whopping £10k additional allowance is now available to you. There was something about "us all being in this together" but I expect this is excluded.

Thanks (2)
Replying to Steve Bower:
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By vstrad
16th Apr 2020 20:47

It's not an allowance, it's an increase in the IPSA budget ceiling for office expenses for expenditure that can be justified under existing rules.

Thanks (1)