Use Of Home As Office – Claiming Expenses Against Tax – COVID-19 Update

You could be affected if any of your employees are making use of home as office while working from home due to coronavirus (COVID-19), either because

• your workplace has closed
• they are following advice to self-isolate

Who is not affected

Furloughed workers who are eligible for the Coronavirus Job Retention Scheme.

Type of equipment, service or supply

Mobile phones and SIM cards (no restriction on private use)

• If you provide a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable.

Broadband

• If your employee already pays for broadband, then no additional expenses can be claimed.
• If a broadband internet connection is needed to work from home and one was not already available, then the broadband fee can be reimbursed by you and is non-taxable.
• In this case, the broadband is provided for business and any private use must be limited.

Laptops, tablets, computers, and office supplies

• If these are mainly used for business purposes and not significant private use, these are non-taxable.

Reimbursing expenses for office equipment your employee has bought

• This is taxable and should be reported on your PAYE Settlement Agreements.

Additional expenses like electricity, heating or broadband

• Payment or reimbursement to your employees of up to £4 a week (£6 a week from 6 April 2020) is non-taxable for the additional household expenses incurred when your employee is making use of home as office while working from home.

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

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

Employer provided loans

• A salary advance or loan to help your employee at a time of hardship counts as an employment-related loan
• Loans provided with a value less than £10,000 in a tax year are non-taxable.

Further information on loans.

Temporary accommodation

• If your employee needs to self-isolate but cannot do so in their own home, you can reimburse hotel expenses and subsistence costs, these are taxable.

Further information on accommodation expenses.