Working From Home – What Can Be Provided Tax Free?

4th May 2020
Heather Janes

There has of course been a huge increase in employees working from home as a result of the coronavirus outbreak. The employer may have closed their premises, or employees may be following advice to self-isolate.

But what are the tax implications of the various items that employers provide to employees in this situation? And can any be provided / paid tax free? Some of the key items – and the associated conditions – are considered below.

Some other benefits changes arising from coronavirus

  • Salary sacrifice – the government guidance on the Job Retention Scheme is that coronavirus counts as a ‘life event’ that could warrant off-cycle changes to salary sacrifice arrangements
  • Child benefit – families that were not previously eligible for child benefit (due to the tapering of the benefit where the annual income of one parent is £50k+) may become eligible if their income has fallen due to coronavirus. Claims can only be retrospective for a maximum of 3 months

Self-employed homeworking costs

There needs to be a reasonable method for apportioning costs between business and private use, for example based on the number of rooms or homeworking time. Costs which can potentially be claimed on a proportionate basis are:

  • Heating, electricity
  • Council Tax
  • Mortgage interest or rent
  • Internet / phone use

Flat-rate simplified expenses can be used as an alternative to actual costs. This method is available to self-employed sole traders and business partnerships that have no companies as partners. Individuals must work 25 hours or more a month from home.

The flat rate does not include phone or internet expenses, which must be claimed based on the business proportion of actual costs.

For further information please contact:

MHA MacIntyre Hudson | 03330 100 220 | |

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