Increase in home working guide line rates

You can reimburse employees who work regularly from home for the additional household expenses they incur without incurring an extra tax or NICs charge. The additional expenses that you may reimburse are those connected with the day to day running of the employee’s home. This might include additional costs of heating and lighting the work area, or additional insurance costs.

Because it might be difficult for you to calculate the exact additional costs, we have previously published a guideline rate that can be paid without you having to justify the amount paid or the employee having to keep any records to demonstrate the additional expenditure. The guideline rate is not a maximum amount and greater amounts can be paid where there is evidence to justify them.

From 6 April 2008 the guideline rate you can pay home working employees without keeping records increased from £2 to £3 per week.