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Employee expenses

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Where an employee was furloughed when they were travelling to a temporary workplace, the period of furlough forms part of that period of continuous work. Working from home will also be part of the period of continuous work. The workplace stops being temporary from the date that the employee’s attendance there is expected to be more than 24 months and tax and NICs will then become due on payments of travel and subsistence expenses. HMRC has updated its main guidance How to treat certain expenses and benefits provided to employees during coronavirus (Covid-19) accordingly.

Home office equipment provided by the employer is not taxable so long as there is no transfer of ownership. HMRC’s updated guidance Check which expenses are taxable if your employee works from home due to coronavirus (Covid-19) confirms that, where ownership is transferred to the employee, the equipment will become a taxable benefit with the tax charge on the market value of the equipment at the time of transfer (less any employee contribution).

As widely reported, where an employee has bought home office equipment for use while working at home, there is no benefit charge on the reimbursement of the exact expense by the employer.

Issue: 1492
Categories: News