Homeworking

By Tolley in association with Philip Rutherford
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The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Homeworking
  • Introduction
  • Equipment
  • Home telephone
  • Household expenses
  • Reporting requirements
  • Travel from home

Introduction

The developments in information technology and communications have seen an increasing popularity in employees working from home. There are a number of tax consequences associated with home working which are outlined below.

There is no set definition of what constitutes a home worker or a single collective set of principles which guide what can and cannot be claimed as a tax deduction. Instead the employee is required to identify allowable expenditure in light of the rules regarding the expense which he has incurred.

From a practical perspective it may be useful to review the employee’s contract of employment with the HR department in order to determine whether the individual is actually required to homework or whether the employee is choosing to do something which may then preclude a tax deduction. It may be worth amending the contract of employment to clarify the position for both the employer and employee.

Equipment

Where an employer provides an employee with equipment to carry out the duties of his employment there should be no tax, NIC or reporting requirements. This exemption applies as long as the employee:

  • is provided with the equipment solely to enable the performance of his duties
  • has only insignificant private use of the equipment provided to him

The exemption arises by way of ITEPA 2003, s 316 and while not specifically listed, the exemption covers all of the equipment that can reasonably be expect

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