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COVID-19: Exemption for reimbursed home office equipment

14 May: Organisations reimbursing staff for equipment purchases enabling them to work from home during the coronavirus pandemic will not have to pay tax, confirms Treasury minister.

The government is introducing a year-long exemption that means employers will not have to pay tax or national insurance contributions (NIC) on reimbursement of staff expenses for home office equipment purchased to enable them to work from home during the COVID-19 crisis.

In a written statement , Jesse Norman, The Financial Secretary to the Treasury, confirmed that the measure is being legislated. It will have effect from 16 March 2020 to 5 April 2021.

To qualify for the exemption, the office equipment must have been purchased for the “sole purpose of enabling the employee to work from home as a result of coronavirus” and the provision of such equipment would have been tax exempt if it had been provided directly to the employee (so is subject to the proviso that private use is not significant). This could include: computer equipment, office furniture or internet access, for example.

Under the normal procedure, employers have to account for tax and NIC on reimbursed expenses of this type via a PAYE settlement agreement. ICAEW’s Tax Faculty, alongside other professional bodies, has been urging the government to make an exemption since the start of the lockdown and welcomed the news.