Top 10 Working from Home Tax Breaks
We wanted to alert you to the fact that there are tax breaks or allowances that can be claimed if you have employees who have to work from home due to COVID-19 either because the workplace is closed or they are self-isolating. Below is our run-through of the Top 10:
- One mobile phone per employee can be provided without tax implications even if it can be used for private calls;
- If an employee didn’t have access to broadband previously and needs access to be able to work the employer can reimburse the broadband fee provided there is no significant private use;
- Laptops, tablets and office supplies are non-taxable as long as they are mainly used for business and ownership of the equipment is not transferred to the employee;
- If the employee incurs expenditure on equipment they need to work from home provided they discuss it with the employer in advance and there is no significant private use the employer may reimburse them without giving rise to tax;
- If the employer does not reimburse the cost of equipment tax relief can be claimed through their tax return or form P87 provided the amount claimed is wholly, exclusively and necessarily incurred;
- Non-taxable payments of up to £6 per week can be made for additional household expenses such as electricity, broadband or heating;
- Loans with a value of up to £10,000 in a tax year are non-taxable;
- Employers can pay a mileage allowance for the employees using their own vehicle on business journeys of up to 45p per mile up to 10,000 miles (25p per mile thereafter) free of tax and National Insurance contributions;
- Make sure that employment contracts and policies are up-to-date limiting private use and that the employee signs a statement confirming that they have read the policy that there is no significant private use; and
- If the employer does not pay a mileage allowance for business journeys, the employee can claim tax relief through their Personal Tax Account or tax return.
Other COVID-19 Information:
Full details of how we can help you around COVID-19 / Coronavirus is available on our special page (www.frenchduncan.co.uk/covid-19) which you can access by clicking here.
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