As a consequence of the Covid-19 lock down, most employees who are able to work from home, and who have not been furloughed, are now working from their private study, spare bedroom, dining room table, etc. So what home expenses can these employees reclaim, tax free, from their employer:
- Supply of a mobile phone and sim card (for work and private use).
- Broadband costs (if any private use is nil/limited).
- Providing/allowing home use of laptops, tablets, computers, and office supplies (assuming there is no significant private use).
- Payments for additional utility expenses such as electricity, heating, etc (weekly flat rate recently increased to £6).
- Early changes to salary sacrifice arrangements (eg employer pension or childcare funding). Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that Covid-19 counts as a life event that could warrant changes to salary sacrifice arrangements if the relevant employment contract is updated accordingly.
- Making small gestures within the trivial benefits exemption (cost £50 or less to provide).
- Use of a company bicycle for mainly home to work commuting and other business use, which is available to all employees.
- Although not an expense reimbursement, interest loans of up to £10,000 can be advanced without triggering a beneficial loan interest tax charge.
Although unrelated to Covid-19, don’t forget that electric company cars can be provided tax free since 6 April 2020.