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Tax break for home office equipment

Written by: Emma Lunn
Employees working from home during lockdown will be exempt from paying income tax and National Insurance on newly-purchased home office equipment.

The tax break is due to a temporary new rule, due to last to the end of the tax year, which aims to stop employees from being left worse off when claiming back the cost of homeworking equipment from their employees.

Jesse Norman, financial secretary to the Treasury, announced the new measure in a written statement to both Houses of Parliament.

He said that for expenditure to be eligible for the tax relief it must have been obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak.

It is also essential that the provision of the equipment would have been exempt from income tax if it had been provided directly to the employee by or on behalf of the employer.

Under the rule, HMRC will exercise its collection and management discretion and will not collect tax and NICs due on any reimbursed payments made from 16 March 2020 to the date these regulations take effect.

Norman said the measure was being announced outside the normal fiscal process in order to ensure that employers and employees are able effectively to manage their working from home arrangements as soon as possible.

People working from home may also be able to claim up to £6 a week to help cover the additional expense of working from home via a little-known income tax relief offered by the government: P87.

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