Tax Tips for you and your employee's
As an employer there are a few benefits that you can give your employees that they will not be taxed on so long as you stick to the rules. These benefits may be helping them with working from home or letting them use a work phone or computer.
The last two on this list, are a bit more personal and can give you the chance to give gifts and take you’re staff out for an annual party. Don’t worry these annual parties can be virtual parties so if you have people working remotely you can do a party over Zoom and still get to enjoy the £150 allowance.
Work from home
If you work form home as an employee or in your own business you may be able to claim an allowance for working from home.
You can claim these two ways it can be an allowance that HMRC gives based on the number of hours that you work from home or it could be based on the actual costs that you spend when working from home.
If you choose to use the allowance it is given as follows
Between 25 and 50 hours per month £10 per month
Between 51 and 100 hours per month £18 per month
101 hours or more per month £26 per month
If you are the director of your own limited company you will have to use the actual costs that you spend. You will instead have to split the costs down that are personal and business. The easiest way is to calculate how many rooms are in your home and how many rooms you use for business. And claim the costs based on that percentage.
If you have 8 rooms and use one for business use 1/8 of the expenses. If you use one solely for business you should take advice if you sell your home as capital gains tax may need to be paid.
You should look to claim the following expenses Mortgage interest or rent, Council Tax, Gas and Electricity, Telephone and Broadband. You may also be able to claim some of the costs of repairs if it affects the room that you work in.
Mobile Phones
If you provide a mobile phone to your employees they do not have to pay tax or national insurance if the following two rules apply.
You provide your employee with one mobile phone or sim card
And the contract is between your business and the supplier
It is not possible for the employee to find their own mobile deal and for you to pay it. It must be with the supplier that you have the contract with and that your business pays the bill. The phone must remain the property of your business it can’t be sold or transferred to the employee when the contract ends or if the employee leaves you must take the phone back from them.
One mobile phone may consist of two sim cards that are on the same number. That is a mobile phone and a hands-free car phone. If the phone is a dual sim phone with two sim cards for two different numbers that will count as two phones.
Computer loaned for work
Since March 2020 we have been working from home a lot more. As part of that move it may have been necessary for a business to provide a laptop to its employees so that they can continue to work from home during the lockdown.
If the laptop is loaned and It remains the property of the business loaning it to the employee and it is used for work without significant personal use there is no tax or national insurance to pay by the employee.
What that means in practical terms is that if you loan a laptop to your employee to use when they work from home, the office or when they are travelling and they use it for work and don’t use it to much personally there is no tax for them to pay. They can take it home to use for work but it must remain the property of the business loaning it and must be returned when the employee leaves.
