In this week’s Q&A, Andrew Gilderdale, VIP Tax Team adviser at Croner-i, explains the tax issues to consider when paying homeworking costs when HMRC comes to call
As part of an HMRC enquiry, HMRC is stating that a benefit in kind would arise for paying an employee more than the flat rate amount of £312 per year for use of home as office expense. This is despite being able to show the additional unit costs of utilities, etc, making up the use of home expense claim.
Is it the case that a benefit in kind would indeed arise on the excess over £312, or is HMRC mistaken?
There may be some overlap here between the exempt homeworking payments under section 316A Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and the availability of income tax relief under s336 for the additional costs of working from home which are reimbursed by the employer.
