HMRC has announced it will increase the guideline rate which employers can use to reimburse employees for additional household expenses. This may include expenses such as gas or electricity charges incurred when staff members have to work from home.
For the tax year 2012-13, starting on the 6 April 2012, the guideline rate will be raised from £3 to £4 per week.
Employers who reimburse employees above this amount can do so, however it will be counted as employee earnings and consequently they need to be taken into account when deducting PAYE tax and national insurance contributions.
We can help work out PAYE and employee expenses. Please contact us to find out more.
Date:27 February 2012