HMRC have announced that it will increase the maximum flat rate tax deduction available where employees incur additional household costs where they work at home under homeworking arrangements, from £4 per week to £6 per week. This will take effect from April 2020
Not really going to make a lot of difference but, as the old saying goes, better than a hit round the head witha wet fish... Is that a general saying or is that just me????
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
My staff have always worked from our office, so I haven't had to utlise this allowance before. The staff are currently furloughed, but may be returning to work next month, albeit from home. So, can anyone tell me how this is paid by the employer please? Presumably through payroll, without tax and NI deductions (up to £6 per week) - but is this allowance reclaimable from HMRC by me (the employer) in order to pay the employees, or do I have to cover this extra cost? I am still covering the (empty) office costs at this time, so every penny counts. Thanks!
My staff have always worked from our office, so I haven't had to utlise this allowance before. The staff are currently furloughed, but may be returning to work next month, albeit from home. So, can anyone tell me how this is paid by the employer please? Presumably through payroll, without tax and NI deductions (up to £6 per week) - but is this allowance reclaimable from HMRC by me (the employer) in order to pay the employees, or do I have to cover this extra cost? I am still covering the (empty) office costs at this time, so every penny counts. Thanks!
If you cannot to pay the staff, get them to claim it. They cannot claim it whilst on furlough.
Thanks Casu. I understand the staff can't claim whilst furloughed (it would be for when they return to work) and that they can claim it directly if need be, however I was wondering if I pay it through payroll, does it become an expense to me, or is it deducted like Employers Allowance through my FPS?
On 15 May 2020 HMRC changed the guidance in its employment income manual to say that from 6 April 2020 for ease of administration it will accept that employees who are required to work at home can claim a deduction of £6 per week (£26 per month), without having to justify that figure, under ITEPA 2003 s 336. For years before 2020/21 HMRC will accept claims for deductions amounting to £4 per week (£18 per month).
However, the four conditions based in the legislation still have to apply.
-the duties that the employee performs at home are substantive duties of the employment. Substantive duties are duties that an employee has to carry out and that represent all or part of the central duties of the employment
-those duties cannot be performed without the use of appropriate facilities
-no such appropriate facilities are available to the employee on the employers premises (or the nature of the job requires the employee to live so far from the employers premises that it is unreasonable to expect him or her to travel to those premises on a daily basis)
-at no time either before or after the employment contract is drawn up is the employee able to choose between working at the employers premises or elsewhere.
Coit have provided some guidance www.tax.org.uk/sites/default/files/200403%201750%20Working%20from%20home%20tax%20reliefs%20and%20exemptions%20guide%20%28revised%29.pdf
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
