Working from home

The rules for employees in relation to ‘use of home as office’ contain a specific exemption from a tax charge. They allow payments made by employers to employees for additional household expenses to be tax free, where the employee incurs those costs in carrying out the duties of the employment under homeworking arrangements. ‘Homeworking arrangements’ means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home.

If you provide equipment, services and supplies to an employee who works from home, you do not have to report or pay anything if they’re only used for business purposes.

If you cover the cost of additional household expenses for an employee who works from home, you do not have to report or pay anything if all the following apply:

  • they need to work from home, either because equipment they need is not available at your workplace, or their work means they have to live too far away from your workplace to travel there every day
  • the amount you give them is not more than their additional household expenses
  • the amount you give them is not more than the current weekly limit

Currently the weekly tax limits are £6 a week or £26 a month for monthly paid employees.

The arrangements do not need to be in writing, but it is advisable to do this, as the exemption does not apply where an employee works at home informally.

When ‘working from home’ becomes the new normal. You should

  • Review and update your working from home policy
  • Undertake a health and safety review of the home working arrangements (virtually!) and prepare a risk assessment of the arrangements
  • Review access to company servers to ensure working from home arrangements comply with confidentiality and GDPR requirements
  • Review Insurance requirements
  • Look at equipment provision such as desk ,chair and robust wifi
  • Carry out a display screen equipment risk assessment (form downloadable from the HSE website)

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