HMRC recently updated guidance on how employees can no longer be furloughed using the Coronavirus Job Retention Scheme. The scheme ended on 30 September 2021. If employees are working from home due to coronavirus (COVID-19), HMRC accepts there are non-taxable costs on types of equipment, services or supply. For example – if you provide a mobile phone and SIM without restriction on private use, this is non-taxable.
If your employee already pays for their broadband, no further expenses can be claimed. If your employee needs broadband to work from home and this was not already available, you can reimburse this and it will be non-taxable. Here, the broadband provided must be for business use and any private use must be limited.
If your employee needs to buy home office equipment in order to work from home, they must discuss this with you first. When you reimburse your employee these costs, then this is non-taxable provided there is no significant private use.
Employers can continue to pay employees £6 a week to cover additional expenses of working from home. They can also pay the amount that would be free of tax and national insurance. It is possible to cover the additional costs of electricity, heating and water whilst working from home. HMRC also confirmed that the amount may be paid regardless of the number of days that employees work from home.
If you need to discuss employee expenses or loans or are looking to develop a more resilient employee expense policy for the future please talk to us and we will be delighted to assist you.