Working from home

Many of our staff members are working from home. Can I reimburse them and get tax relief?

Employers can reimburse costs tax-free where there is a ‘homeworking arrangement’ between an employer and an employee and the employee must work at home under the terms of these arrangements.

A notable exception here is costs that are unaffected by whether or not an employee is working from home or not, like mortgage repayments or rental payments.

Similarly, the cost of existing broadband connections cannot be reimbursed tax-free, although new connections can be, where the employee does not already have a broadband connection.

In circumstances where the employer does not meet the additional costs of an employee working from home – such as heating, water and electricity – but requires the employee to work from home, it may be possible for the employee to claim tax relief in respect of these costs. Expenses for both personal and business use are not eligible for tax relief.

Employees can use HMRC’s online tool to determine whether particular expenses would be eligible for tax relief. The tool can be viewed here.