Non-taxable payments and benefits – guidance update
10 March 2021
As advised in our previous news article, the temporary tax and National Insurance (NI) contributions exemption, applicable to the cost of home office equipment when an employer reimburses a member of staff who is working at home because of coronavirus, has been extended until April 2022.
To reflect this extension, guidance pages on GOV.UK have now been updated.
In order for the cost of the reimbursement to be exempt from tax and NI, then the expenditure must meet the following two conditions:
- Equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak
- The provision of the equipment would have been exempt from income tax under section 316 of ITEPA if it had been provided directly to the employee by or on behalf of the employer
Section 316 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) provides a tax exemption where an employer provides home office equipment directly and retains ownership of that equipment, and the employee’s private use is not significant.
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