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Temporary Tax Exemption for Home Working Equipment

on Friday, 22 May 2020.

Last week the Treasury announced a temporary income tax and National Insurance Contributions (NIC) exemption in relation to reimbursement for office equipment to enable home working.

Section 316 of the Income Tax (Earnings and Pensions) Act 2003 provides that no liability to income tax arises where "accommodation, supplies and services" are provided to employees for the performance of their duties, provided that certain conditions are met. The exemption is based on the accommodation, supplies and services being supplied to the employee directly, as opposed to on a reimbursement basis.

Following the Treasury's announcement, a further exemption will apply in relation to home working office equipment purchased by the employee and reimbursed by the employer where:

  • the equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus (COVID-19)
  • the provision of the equipment would have been exempt from income tax if it had been provided to the employee directly by the employer

The stated purpose of the measure is to ensure that employees and employers are able to effectively manage and facilitate their working from home arrangements as soon as possible.

The exemption is relevant in relation to equipment reimbursed from 16 March 2020 and is a temporary measure in force until the end of the tax year 2020-2021.

Coronavirus Legal Advice

For legal advice on this temporary tax exemption, please contact Charlotte Rose in our Employment team on 07741 311065, or complete the form below.

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