A taxing time when mother nature dictates working patterns

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The “Beast from the East” has landed in the UK covering the country in a blanket of snow and causing problems for employees getting to work, not just in travel terms but also for example last minute childcare due to school closures. In this age of remote working and instant communication, here is a brief guide to the tax points relevant where Mother Nature dictates working patterns.

Employers can provide employees with a mobile phone without giving rise to a benefit in kind charge, even if that phone is mostly used for private calls. However where an employee uses their own phone for business, only the additional cost incurred for doing so can be reimbursed tax/NIC free – any payment towards standing charges such as line rental (including inclusive minutes) will be taxable.

Employers can also provide laptops to staff and if predominantly used for business, will not be considered a benefit in kind but the reimbursement for using an employee’s own computer will be taxable unless that cost is wholly, exclusively and necessary for work with no private use.

For regular home based employees, employers can pay for the installation of dedicated phone lines or broadband connections for work use without a tax charge although if the employer reimburses an employee’s cost of installing the lines/connections it will be taxable unless there is absolutely no private use – something that is unlikely. While contributions towards heating, lighting and power costs at home will also fail the exclusive business use test, employers can pay an allowance of up to £18 per month tax free (and without the need to provide receipts) towards the cost of home working for employees who are expected to work from home and regularly do so.

Travel costs between home and work are generally taxable although it is worth bearing in mind that if an employee is unexpectedly working beyond 9pm and this is neither regular nor occurs more than 60 times per year, employers can pay for a taxi home without giving rise to a tax charge. However if an employee is stuck at work as their trains are cancelled due to the weather, any payment for alternative travel home will be taxable – the relevant tax exemption covering public transport disruption only relates to industrial action.

If an employee is stuck at home without access to work, employers may require the employee to take that time as annual leave. Employees wishing to add further annual leave may do so by trading in salary – that salary exchanged for holiday will not be liable to PAYE/NIC and would save employer’s NIC too.

If you have any questions on how these could impact you, your company or your employer, please contact your usual Saffery Champness partner.

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