Covid-19 The expenses which are taxable if your employees are working from home due to coronavirus

The Government have confirmed what equipment, services or supplies are taxable if your employees are working from home due to coronavirus.

Your employees could be affected if they are working from home due to coronavirus (COVID-19), either because: your workplace has closed or they are following advice to self-isolate.

Furloughed workers are not affected by this announcement.

Types of equipment, service or supply

Mobile phones and SIM cards (no restriction on private use)
If you provide a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable.

If your employee already pays for broadband, then no additional expenses can be claimed.
If a broadband internet connection is needed to work from home and one was not already available, then the broadband fee can be reimbursed by you and is non-taxable.
In this case, the broadband is provided for business and any private use must be limited.

Laptops, tablets, computers, and office supplies
If these are mainly used for business purposes and not significant private use, these are non-taxable.

Reimbursing expenses for office equipment your employee has bought
This is taxable and should be reported on your PAYE Settlement Agreements.

Additional expenses like electricity, heating or broadband
Payment or reimbursement to your employees of up to £4 a week (£6 a week from 6 April 2020) is non-taxable for the additional household expenses incurred when your employee is working from home.

If the claim is above this amount, then your employee will need to:

  • check with you beforehand to see if you will make these payments
  • keep receipts

For full details on the above including how to report to HMRC, use the button below to visit the government website.

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