Tax & Accounting News

Tax-free bonus to working from home

08/04/2009

More and more companies are happy for their staff to work from home, either occasionally or on a regular basis, which creates potential tax implications for employer and employee.

Where the company provides equipment to be used away from the office, the employee could face a personal tax bill of 20 per cent a year on the value of the asset, as a benefit in kind. The company could also face a Class 1A national insurance charge on the benefit.

However, under HMRC rules, provided that any company-owned assets used at home are intended only for work-related purposes, there is no benefit in kind charge.

Businesses that allow home working to take place would be wise to update employment contracts to reflect this policy and to state that company-owned assets are intended for business use only.

For more information, please contact us.