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Tax-free aids for homeworkers

A director has been injured in a car accident. This has made it difficult for him to commute to the office. The company is paying to provide special equipment at home so he can work. Will this count as a taxable benefit in kind?

Working from home

Working from home is increasingly common these days, and despite the tax system being slow to react to change, there are a few special tax provisions to help employees (including directors) and employers in this situation. For example, an employer can pay a tax and NI-free allowance to cover additional domestic costs.

Equipment

Employers can also provide equipment for work which won’t count as a benefit in kind as long as there is only minor personal use (see The next step ).

However, if the equipment is not specifically and normally needed to do the employee’s job it counts as a taxable perk. For example, an employer-provided coffee maker; while some of us need a coffee before we can start, it’s not a requirement of the job (unless your job is coffee tasting!).

Note. Tax legislation includes an exemption for equipment or services which an employer provides to help a disabled employee do their job.

Special situations

The exemption applies whether the employee works at your premises or at home. For example, you might provide a wheelchair for their use at work. The exemption can cover anything from hearing aids to the installation of special fittings to help them work at home, e.g. easy to access power sockets. However, the exemption has conditions.

Conditions

Where the equipment or service has a personal benefit, the exemption only applies if the “main purpose of providing the benefit is to enable the employee to perform the duties of his employment.”“Main” means more than 50%, although actual usage might be difficult to measure. In practice, HMRC won’t challenge the exemption where there is a clear job-related motive for providing the equipment, etc. Also, the employee’s disability must fall within the Equality Act 2010 Access to Work scheme.

What counts as disabled?

You can find detailed guidance on what counts as disabled for the purpose of the Access to Work scheme on GOV.UK (see The next step ). However, the key factors are that the employee must be:

  • normally resident in, and working in, Great Britain
  • aged 16 or over
  • have a disability or long-term health condition that requires adaptation or financial or human support to do your job; or
  • have a mental health condition and need support in work.

The cause of the disability is not relevant, i.e. it could be the result of illness or injury. To count as long term the disability must be expected to last more than twelve months.

Where the equipment is needed to do the job and there’s only minor private use, a general tax and NI exemption applies. A further exemption applies to the provision of equipment or services which have a significant personal benefit but are “mainly” for work if the employee is disabled for a year or more.
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