Temporary tax and National Insurance exemption for reimbursements for home office expenses due to coronavirus
15 May 2020
Financial Secretary to the Treasury, Jesse Norman, has confirmed that, in order to help employees working from home who have had to buy home office equipment as a result of the coronavirus crisis, and are reimbursed for it by their employer, there will be no associated tax and National Insurance (NI) liabilities to pay on those expenses.
This is a temporary measure and there are two conditions that must be met in order for the purchases to be eligible for the relief:
- The equipment must be purchased for the single purpose of enabling the employee to work from home due to the coronavirus outbreak
- Providing the equipment would have been exempt from income tax should it have been provided directly to the employee by, or on behalf of, the employer
The measure will take effect from the day after the regulations come into force, but HMRC will not collect tax and NI contributions on any reimbursed payments made on or after 16 March 2020, as this was the date that the government encouraged companies to allow their staff to work from home. The government plans to lay the statutory instruments to update these charges shortly.
The announcement has been made outside of the standard fiscal process to allow employers and employees to manage their work from home arrangements at the earliest opportunity.
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.