In general, the reimbursement by an employer of employee expenses is\ntreated for tax purposes as earnings from the employment for the tax year in\nwhich they are paid (ITEPA 2003 ss 70 and 72) and will be taxed in the normal\nway. There is, however, an exemption for \u2018homeworking arrangements\u2019 which\ncovers payments made by an employer to an employee in respect of reasonable\nadditional household expenses incurred in carrying out duties of their\nemployment at home (ITEPA s 316A). This is currently up to \u00a34 a week (or \u00a318 a\nmonth) but, as announced in the Budget, will be increased to \u00a36 a week from 6\nApril 2020. An exempt homeworking payment under s 316A can be made to employees\nwho work at home under a voluntary homeworking scheme (which is a crucial\ndifference to other expenses claimed by employees outside of these\narrangements).<\/p>\n\n\n\n
Costs that may be covered by such homeworking payments include\nadditional costs of heating and lighting the work area or the metered cost of\nincreased water use, provided that the additional household costs are\nreasonable and incurred in carrying out the employee\u2019s duties. There might also\nbe increased charges for internet access, home contents insurance, business\ntelephone calls or the additional cost incurred as a result of business rates\nliability (EIM01474). Broadband costs will only be tax exempt if the employee\nis not already paying for a broadband connection (EIM01475). Payments for costs\nthat would be incurred whether or not the employee worked at home \u2013 for\nexample, mortgage interest, rent, council tax or water rates \u2013 will not be tax\nexempt.<\/p>\n","protected":false},"excerpt":{"rendered":"
In general, the reimbursement by an employer of employee expenses is treated for tax purposes as earnings from the employment for the tax year in which they are paid (ITEPA 2003 ss 70 and 72) and will be taxed in the normal way. There is, however, an exemption for \u2018homeworking arrangements\u2019 which covers payments made … <\/p>\n