HMRC publishes new guidance highlighting which expenses are taxable for employees working from home due to COVID-19
HMRC have confirmed the tax and NIC treatment of expenses incurred relating to equipment, services or supplies provided if your employees are working from home due to COVID-19.
The affected employees consist of individuals who work from home due to COVID-19, either because:
Affected employees do not include workers who have been furloughed.
There are a number of exemptions for certain types of employee expenses and benefits which include;
Where the conditions for exemption are met, no tax or NIC should arise.
Where not exempt, HMRC has confirmed that taxable expenses and benefits incurred from working from home due to COVID-19 can be included on the annual PSA. This confirmation is welcome.
If your employees are incurring taxable expenses in this way you can settle the tax and NIC due on these expenses through a PSA.
If you already have a PSA in place you may need to contact HMRC to ask them to amend the current enduring agreement. This will need to be done as soon as possible as the deadline to have the finalised PSA agreement in place with HMRC for the 2019/20 tax year is 6 July.
The deadline to apply for a new PSA if you do not have one in place is 6 July.
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