COVID-19 Related Employee Expenses & Benefits

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Changes to working practices across the country as a result of the Coronavirus, have raised questions over how employee-related expenses and benefits will be treated for tax purposes

It may be that you have employees working from home for the first time, or perhaps your employees are taking part in Covid related volunteer work, or maybe you have provided loans to employees during this difficult time.

For employees who have been working from home, you can check which expenses are taxable. Anything else is considered non-taxable and does not need to be reported.

HMRC have also now published official guidance on how to treat other Coronavirus related expenses and benefits.

There is specific guidance for a wide range of scenarios, including:

  • Living accommodation
  • Volunteer fuel and mileage costs
  • Paying or refunding transport costs
  • Free or subsidised meals
  • Company car “availability”
  • Employee Car Ownership Schemes (ECOS)
  • Salary sacrifice
  • Employer provided loans
  • Taxable benefit charge – returning office equipment

Reporting to HMRC

As with all taxable expenses and benefits, these must be reported to HMRC.

HMRC have said that any expenses or benefits related to Coronavirus can be reported on your PAYE settlement agreement.

However, you can also continue to report through Payrolling (if you are registered for this) or using the P11D returns.

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