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WFH – Homeworking Expenses for Employees

With many employees currently working from home, there have been two welcome concessions for HMRC regarding the tax treatment of expenses.

  • Personal purchases of equipment to be used for work purposes.
  • Tax relief on homeworking expenses.

Personal purchases of equipment

Usually, the purchase of equipment such as monitors, printers, desks, etc personally by an employee and later reimbursed by the company would lead to a tax bill for the employee.

The new rules introduced allow a temporary concession for the tax year to 5th April 2021 (and also by discretion from 16th March 2020 to 5th April 2020.)

In order to qualify, there are two condition that have to be met:

  • The equipment was purchased for the sole purpose of enabling homeworking as a result of Covid-19 restrictions.
  • The equipment purchases would have been tax exempt if provided directly by the employer.

Homeworking expenses

Companies are allowed to pay their employees a tax-free homeworking allowance of up to £6 a week or £26 month from 6th April 2020 (£4 a week before 5th April 2020.)

This is to cover additional homeworking expenses, such as heat and light.

While previously the fixed-rate tax relief was only available on employer payments, from 15th May it is now possible for employees to claim themselves if the company isn’t making payments to them.

Employees can now claim £6 a week/£26 a month in their 2021 tax returns for periods where they were required to work from home but were not paid a homeworking amount by their employer. In addition, the cost of non-reimbursed business telephone calls can be claimed on top.

The weekly amount is a fixed-rate deduction and no receipts are required to be kept for this. Records of business telephone call costs should be kept.

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Accountant in Surrey

Are you looking for a personal tax specialist?

I built up my tax experience in industry and practice over 17 years before founding my own practice in 2006.

Based in Cobham, Surrey I can also help clients throughout the UK.

  

My goal is to make personal tax and accounts for the self-employed as easy as possible for clients

 

Award-winning Accountant

Small Business Saturday is the UK's most successful small business campaign. Only one hundred of the UK’s top small businesses are selected each year for the SBS100. They act as trail-blazers in the official count-down towards the annual event.

I was one of the alumni from the 2014 Small Business Saturday 100, resulting in two visits to Downing Street.

In the Surrey Digital Awards from 2015 - 2018, I was also the winner of several top awards.

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