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 | email@example.com | www.macintyrehudson.co.uk