Home working bonus for employees

Jul 9, 2020 | Uncategorized

Shropshire employees working from home due to the Coronavirus pandemic could receive extra allowances according to a local tax expert.

Elwyn Turner is a director at Dyke Yaxley Chartered Accountants and he said during lockdown, many businesses had seen increased engagement and renewed commitment from their employees.

“In such a significantly challenging situation, it’s clear that employers and employees have needed to adapt quickly and effectively in order to keep business moving.

“And some employers may decide this dedication should be rewarded, with extra payments to cover the additional household expenses their staff face.

“HM Revenue and Customs says the tax-free amount can be decided by itemising specific costs which can be recorded and quantified, such as the installation of a new telephone or broadband connection.

“As an alternative, they will allow a tax-free payment of £6 per week – up to £26 per month.”

Mr Turner said there were traps to avoid though in the process, and business owners should seek professional advice to ensure they were following correct guidelines.

“If an employee chooses to work at home on certain days simply because it’s more convenient, then the option for extra tax-free payments wouldn’t necessarily apply.

“But HMRC’s guidance rules that if an employee is working from home due to Covid-19 – either because their workplace has closed, or because the employee is following advice to self-isolate – that would be considered a formal homeworking arrangement.

“In any other circumstances where employees are working from home as part of your company’s response to the pandemic, it’s advisable to agree with them in writing that you consider them to be operating under homeworking arrangements.

“If you are unable to make a contribution towards staff homeworking costs perhaps for cashflow reasons, your employees can still claim the allowance online directly with HMRC.

“These are strange times indeed for all of us, but if you feel it’s appropriate and your finances allow, extra payments are a positive and visible way to reward staff for going above and beyond in such challenging conditions.”

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