Working from Home Allowance and JSS changes
October 23, 2020
Staff can claim a tax free allowance for home working
Working from Home Allowance
Staff that are working from home may be able to make a tax relief claim. From 6th April 2020 they can claim £6 per week without having provide any evidence of costs incurred. Alternatively, the employee can claim the exact amount of costs incurred in working from home. This would include additional costs such as heating, new broadband connection and business calls, but not costs that would have been incurred irrespective of whether the employee was working from home, for example rent or mortgage interest. Staff may also be able to claim relief for equipment or furniture they have purchased for home working.
The following conditions apply:
- The staff member must not be working from home through choice
- The employer can’t have already compensated the staff member for any costs they are incurring by working from home.
Job Support Scheme Changes
The UK Government has updated its plan for jobs to increase support for business in the winter period.
The Job Support Scheme will come into effect on 1 November 2020 and will replace the initial Furlough scheme. The government has made the following changes to its initial proposals:
- The minimum hours required for employees to work has dropped from 33% to 20% and
- the employer contribution for non-worked hours has dropped from 1/3 to 5%.
The Government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing 5% of non-worked hours up to a cap of £125 per month. These caps are based on a monthly reference salary of £3,125. This will ensure employees earn a minimum of at least 73% of their normal wages, where their usual wages do not exceed the reference salary. The employee will have to work a minimum of 20% of their normal hours.
To give an example of the impact of these changes. An employee is normally paid £1200 per month (ignoring tax / NIC for simplicity):
Initial Proposal
| Hours Worked | Employer Pays(Gross) | Government Pays | Employee Receives (Gross) | Percentage of Normal Pay employee receives |
| 33% | (400+267)=667 | 267 | 934 | 77.8% |
| 50% | (600+200) =800 | 200 | 1000 | 83.3% |
| 75% | (900+100)=1000 | 100 | 1100 | 91.6% |
This has now been changed to:
| Hours Worked | Employer Pays(Gross) | Government Pays | Employee Receives (Gross) | Percentage of Normal Pay employee receives |
| 20% | (240+48)=288 | 592 | 880 | 73.3% |
| 33% | (400+40)=440 | 493 | 933 | 77.8% |
| 50% | (600+30) =630 | 370 | 1000 | 83.3% |
| 75% | (900+15)=915 | 185 | 1100 | 91.6% |
There is no change in the amount received by the employee, but the employer’s contribution is substantially reduced.
Full details can be found at:
