There are lots of phrases we’d never heard of before the Coronavirus pandemic struck. A few of them will fade, but one term that’s here to stay is ‘hybrid working’.
‘Working from home’ (wfh) became the norm for vast numbers of employees and, crucially, allowed organisations to keep operating and stay in business.
However, whilst many companies reported a rise in productivity, many did not. Not everyone was happy (kids popping up on Zoom, next doors’ dog yapping through the adjoining wall, anyone?)
Staff also missed their colleagues, work-friends and the office vibe.
Happy employees = happy organisations
So, an answer has emerged in hybrid working, offering the best of both worlds. Time spent at the office allows collaborative working, creativity, connectivity, and human contact. On the other hand, time spent wfh offers flexibility, an improved work/life balance and a break from the commute.
There’s plenty of advice on the internet about the best ways to set this up for your organisation. ACAS is an excellent place to start and has guides to download on various related topics (see links at the foot of this blog).
Tax-wise, it’s not too complicated, although some of the tax exemptions set up in response to the pandemic may change or disappear at the end of the current tax year (April 5th 2022).
The following refers to rules that apply at the time of publication. Please check any advice, either with HMRC or with a qualified accountant.
Is hybrid working any different, tax-wise?
Under hybrid working, an employee’s permanent workplace is the employer’s premises or usual place of work, even if they only spend one day a week working there. Any travel between the home and the workplace is considered everyday commuting. Therefore, any reimbursement of travel costs to an employee is taxable and subject to National Insurance contributions.
An employer must check that the home or wherever the employee is working is a safe and healthy environment. Many provide office equipment and devices to work on, but employers are not under any obligation to do so. For example, if the employer agrees to an employee buying a desk and office chair, the employer can reimburse the cost, and there is no tax liability for the employee.
Things may be about to change?
During the pandemic, a tax-free allowance for home workers acknowledged the fact that household expenses would rise owing to increased utility bills. This scheme has since been widened and is more generous at £6 per week. However, this is one of the temporary measures that may now be under some doubt after April 2022.
Changes to working life and the way we allocate time, resources and even how we recruit staff have been turned upside down by this working revolution. Tax-wise, however, it’s not been nearly as exciting despite HMRC being an early and enthusiastic adopter of the hybrid working model.
Please see the following sources for more information or contact Rackhams Accountants.
Free, no-obligation business start-up consultation
Rackhams Accountants offers a free, no-obligation business start-up consultation, including your tax obligations as an employer. Call 01482 631700 to book today, or see our website:
The Advisory, Conciliation and Arbitration Service (ACAS)
Guides for Hybrid Working:
https://www.acas.org.uk/policies-for-home-and-hybrid-working
https://www.acas.org.uk/policies-for-home-and-hybrid-working/treating-staff-fairly
https://www.acas.org.uk/policies-for-home-and-hybrid-working/arrangements
https://www.acas.org.uk/policies-for-home-and-hybrid-working/how-to-structure-a-policy
HMRC http://www.gov.uk/
