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Employee travel expenses11/8/2023 ![]() If an employee splits their working time between home and the office, then they will have two permanent workplaces and cannot claim tax relief on the costs of travelling between them (as it is treated as ordinary commuting). They can also get relief on the costs of travelling to another temporary workplace such as a client's premises. If an employee works from home full-time, they can get tax relief on the unreimbursed travel costs of travelling to the office - provided that the trip is not undertaken regularly and HMRC accepts that the office is a temporary workplace. Where an employee has spent, or is likely to spend, 40% or more of their working time at a particular workplace over a period of more than 24 months, HMRC will treat it as a permanent workplace rather than a temporary workplace. A temporary workplace is somewhere the employee goes only to perform a task of limited duration or for a temporary purpose.Attendance is regular if it is frequent or follows a pattern, so that fortnightly travel, for example, is capable of being regarded as regular. A permanent workplace is somewhere the employee attends regularly for the performance of their duties.The HMRC rules on this are complex and centre on the definitions of 'permanent workplace' and 'temporary workplace': This will depend on whether the employee works from home full-time or part-time and how regular their trips into the office are. If an employee works from home can they claim tax relief on travel expenses for trips to the office? For example, if they pay 20% basic rate of tax and claim tax relief on £6 a week, they will get £1.20 per week in tax relief. Anyone wanting to deduct more than this will be expected to keep records and be able to show how their figure has been calculated.Įmployees will get tax relief based on the rate at which they pay tax. Employees who satisfy the conditions for relief are entitled to a deduction of £6 per week/£26 per month. In October 2020 HMRC launched an online portal giving employees the opportunity to make the claim for tax relief more easily. ![]() Relief can't be claimed for insurance costs. However, for tax years 2020/21, 2021//23 a deduction from taxable earnings is allowed for household expenses for the full tax year even if the employee was only required to work from home for part of the tax year (either by their employer or due to government advice on COVID-19).ĭeductions can be claimed for additional heating and lighting costs any metered cost of water used in the performance of duties and the costs of business telephone calls and business internet connection. This can be a difficult test to meet, particularly as HMRC does not usually allow claims where the employee has at any time had a choice of whether to work from home or not. Not all employers reimburse the costs of homeworking, however, there is an opportunity for homeworkers to claim tax relief themselves.Įmployees can claim tax relief on household expenses if they can demonstrate that they were incurred 'wholly, exclusively and necessarily' in the performance of their duties. Can homeworkers claim tax relief on household expenses? A broadband connection fee can only be reimbursed tax-free where the employee does not already pay for a broadband internet connection at home and needs one to work remotely. Costs that would be the same whether or not the employee works at home are not covered. This could include any additional heating and lighting costs metered cost of increased water use business phone calls internet access home contents insurance and business rates (if applicable). You can reimburse a greater weekly amount tax free provided there is supporting evidence to show that the payment is wholly in respect of 'reasonable additional household expenses'. It's not necessary to pro-rate it for anyone only working at home part-time. HMRC will approve a tax and NI free payment of up to £6 a week to an employee working at home (£26 a month for monthly paid employees) without supporting evidence of the cost. ![]() Payments made to reimburse an employee's reasonable additional household expenses incurred while working at home can be made tax-free - provided that the employee works at home regularly and you have agreed that they can do so. Can we make tax free payments to reimburse homeworkers for their household expenses? Employees working from home may also be entitled to claim a deduction against taxable income for some of their household expenses and travel costs. ![]() Any business operating remote or hybrid working should consider the potential tax relief and exemptions available to employees working from home.Įmployers can make tax-free payments to directly reimburse homeworkers for certain household expenses.
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