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Since the beginning of the Covid-19 pandemic, the majority of a business’ workforce have been forced to work from home. This has caused significant disruption to working patterns, with businesses deploying more flexible working arrangements in order to comply with lockdown restrictions. As the cost of living rises and many countries experience an energy price hike there’s a growing concern over the cost of working from home.
What are the hidden benefits to remote work?
Significant evidence exists that remote employees experience productivity benefits. According to research published in Harvard Business Review, remote workers are are an average of 35-40% more productive than their office counterparts and see 4.4% output increases. Remote workers additionally see 41% lower absenteeism.
Employers are currently able to make a tax-free payment of £6 per week to employees to cover additional household expenses as a result of working from home under a home working arrangement. However, this is usually only available if you are obliged to work from home, and are not working from home by choice. HMRC have relaxed these requirements during the coronavirus pandemic, so that relief is available where an employee works from home under any circumstances. As well as these tax relief benefits from working from home, remote workers from across all countries can also enjoy many powerful environmental benefits of remote work as well as savings from high commute costs. Full-time remote workers and self-employed people can also claim full remote work business expenses. For them to qualify, they need to have a dedicated and separate home office – an area which is purely for work purposes . However, due to many employees wanting to continue to work from home this may blur the lines of where an employee’s ‘permanent workplace’ is.
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The Australian government also offers remote workers the “52 cents per hour method”, which employees may find more simple to apply for. The method offers 52 cents per working hour and allows remote workers to itemise certain deductions such as telephone costs and internet expenses.
However, from 6 April 2022, the £6 a week can only be claimed if your job requires you to work from home because you live far away from your office or if your employer benefits of working remotely does not have an office. If you previously claimed tax relief when you worked from home because of coronavirus (COVID-19), you might no longer be eligible.
Covid and internationally mobile workers
You cannot claim for things that you use for both private and business use, such as rent or broadband access. As the way we work continues to evolve at a global level, employers are looking to appoint the right people to move their organisation forward. This is usually available where the employee works under a homeworking arrangement. However, during the pandemic, this is also available to employees who must work from home due to COVID-19 (ie. so not working at home by choice). You must prove that you need an office for your work and that your home office is only used for your business and dedicated to work use.
The tax break allows you to write off 100% of office-related expenses such as furniture, office repairs, and a proportion of your household bills. To qualify for this, you need to keep a record of all your expenses and fill out a form with the American government. If the employer does not wish to make the payments to their employee, the employee can only personally claim tax relief on their additional household expenses if the homeworking is not voluntary . The pandemic has also seen an increase in employees travelling abroad to second homes or long-term holiday rentals and continuing their employment from an overseas country.
