From 6 April 2003 employers have been able to make tax free
payments to meet or reimburse the additional household costs
incurred by employees who work at home under homeworking
arrangements. The legislation is in Section 316A ITEPA 2003 and
there is guidance on the exemption at
EIM01472 onwards.
Section 316A only provides an exemption for employer
payments. It does not change the law on deductions for
employees’ unreimbursed household expenses. The circumstances
in which an exempt payment can be made are much less restrictive
than the circumstances in which an employee is entitled to relief
for household expenses under Section 336. In particular, exempt
payments can be made to employees who work at home under a
voluntary homeworking scheme. So the fact that an exempt payment
has been or could be made does not mean that the employee is
entitled to relief for household expenses.
The examples at
EIM32830 illustrate the inter-action
between the deduction for an employee’s unreimbursed
homeworking expenses (Section 336) and the separate exemption for
homeworking payments reimbursed by the employer (Section 316A).
