Tax

Before homeworking begins the employee and the employer need to be clear who is paying for the costs incurred by working from home — for example, the costs for heating, electricity and lighting. The employer needs to make clear what they will reimburse and what is taxable.

If the employer contributes to the homeworker’s extra running costs (such as heating bills) these contributions will be taxable.

The tax free homeworking allowance permitted by HM Revenue and Customs, is currently £4 per week pro-rata to hours of work.

Full guidance on the tax implications of homeworking is available at: www.gov.uk/expenses-and-benefits-homeworking/what-to-report-and-pay.