{"id":5520,"date":"2024-01-11T14:57:44","date_gmt":"2024-01-11T14:57:44","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=5520"},"modified":"2024-01-11T14:57:45","modified_gmt":"2024-01-11T14:57:45","slug":"working-remotely-what-are-the-tax-implications","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/working-remotely-what-are-the-tax-implications\/","title":{"rendered":"Working remotely \u2013 What are the tax implications?"},"content":{"rendered":"<p>Working remotely has increased since the Covid pandemic, with 12.7 per cent of employees now working full-time from home in 2023.<\/p>\n<p><!--more--><\/p>\n<p>As an employer, you need to ensure you have a comprehensive and up-to-date remote working policy to address possible tax implications.<\/p>\n<p>These issues include:<\/p>\n<ul>\n<li>Permanent workplaces and travel expenses<\/li>\n<li>Provision of home office equipment<\/li>\n<li>Payment of expenses.<\/li>\n<\/ul>\n<p><strong>Permanent workplaces and travel expenses<\/strong><\/p>\n<p>A permanent workplace is a place where your employee attends regularly to work.<\/p>\n<p>When letting an employee work remotely, your decision could result in a change to your employee\u2019s permanent workplace, which will affect your taxes on employee travel expense claims.<\/p>\n<p>HMRC states that home working is a personal choice which means your employee\u2019s place of work might not be classed as a permanent workplace for tax purposes.<\/p>\n<p>If an employee works using a hybrid schedule (where they must be in the office for part of the week), then their office will likely remain as their permanent workplace.<\/p>\n<p>Unless their home is accepted as their workplace, their travel into the office will be classed as a normal commute.<\/p>\n<p>When your employee reimburses their home-to-office commuting expenses, they will find that these expenses are taxable and liable to the current NIC rates, changed by the Autumn Statement 2023.<\/p>\n<p>No matter the situation, it is always important to reassess your position when employees move to hybrid and remote working.<\/p>\n<p>You should:<\/p>\n<ul>\n<li>Update your expense policy<\/li>\n<li>Update your employment contracts (where necessary) to reflect any changes.<\/li>\n<\/ul>\n<p><strong>Provision of home office equipment<\/strong><\/p>\n<p>You might need to provide equipment, services, and supplies if an employee works from home.<\/p>\n<p>If the employee uses the resources purely for tax purposes or their \u2018private use\u2019 is deemed insignificant, then the equipment provision will be exempt from tax and NIC.<\/p>\n<p>However, if these conditions are not met, then you will need to ensure you are tax compliant for homeworking expenses and benefits.<\/p>\n<p>A tax liability may arise if ownership of the equipment passes to the employee, so care needs to be taken when the old equipment is updated or replaced.<\/p>\n<p><strong>Payment of expenses<\/strong><\/p>\n<p>Where the employee is working from home under a homeworking agreement, and extra household costs are created for carrying out employment duties, you can either:<\/p>\n<ul>\n<li>Reimburse the employee for actual reasonable additional household expenses<\/li>\n<li>Pay an HMRC-agreed tax and NIC-free allowance of up to \u00a326 per month or \u00a36 per week.<\/li>\n<\/ul>\n<p>Many employers decide to contribute to additional household running costs by paying the tax and NIC-free allowance of \u00a326 per month.<\/p>\n<p>This only applies if there is a formal homeworking arrangement in place, where the employee regularly performs some or all employment duties at home.<\/p>\n<p>No relief is due in circumstances where the employee has chosen to work from home from 6 April 2022.<\/p>\n<p>You should continue to assess whether the employee is still performing their duties from home, especially if you pay the tax and NIC-free allowance.<\/p>\n<p><strong>If you would like advice on whether to allow your employees to work remotely, please get in touch today.<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Working remotely has increased since the Covid pandemic, with 12.7 per cent of employees now working full-time from home in 2023.<\/p>\n","protected":false},"author":2,"featured_media":5522,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,125,30,56,31,60,96,134,7],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5520"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=5520"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5520\/revisions"}],"predecessor-version":[{"id":5521,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5520\/revisions\/5521"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/5522"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=5520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=5520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=5520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}