May 2008

Increase in expenses payments for home workers

Bradford based Chartered Accountants Auker Rhodes are advising employers of the recent increase in tax and NIC exempt payments that can be made to employees that work from home.  The increase took effect on 6 April 2008.

The payment is to cover reasonable household expenses that are incurred when an employee works from home.  HMRC believe that £3 per week should be sufficient to cover the costs of heating and lighting a home working area in most cases.  The previous amount paid was £2 per week.

These amounts, however, are not a maximum sum.  The £3 per week can be paid to employees without having to be justified.  Employers can increase the amount and pay more if records are kept to show how the sums are being computed.  For the money to be eligible for tax and NIC exemption, employers must prove that the costs incurred are reasonable additional household expenses.

For more information contact  Ian Hales on 01274 548000.

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