Who is affected?
You could be affected if any of your employees are working from home due to coronavirus (COVID19), 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.
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
If your employee needs to buy home office equipment to allow them to work from home, they will need to discuss this with you in advance.
If you reimburse your employee the actual costs of the purchase, then this is non-taxable provided there is no significant private use.
If you do not reimburse your employee, then they can claim tax relief for these purchases on their tax return or P87 as long as the amount claimed is incurred wholly, exclusively and necessarily in the performance of their duties of employment. The occasions on which an employee would qualify to claim tax relief will be rare, as there are strict conditions to be met and eligibility will depend on the facts at the time.
Your employees will need to keep records of their purchase and claim for the exact amount. For more information on the strict tests that need to be passed in order to qualify for tax relief see the guidance on Employment Income.
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 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-
Loans provided with a value less than £10,000 in a tax year are non-taxable.