COVID-19 dramatically and swiftly changed the way that many employees normally work – and where they work from. As working arrangements change and, hopefully, settle into new patterns, are employers’ pre-pandemic expenses policies still suitable for the future?
Across many sectors employees have spent much of the pandemic working from home, and it appears almost certain that home working arrangements will continue post-pandemic, at least partially, for a significant number. For countless employees the location where they normally work is likely to switch from the office to a mix of home and office (or even elsewhere). Historically, the travel element of expenses policies have focussed on allowable business travel – which can normally be reimbursed free of income tax and national insurance contributions – and excluded commuting travel, which would create income tax and national insurance liabilities if reimbursed. In the future will there be less clarity and, if so, is your expenses policy clear on both what can be reimbursed and what the tax consequences of that reimbursement will be? Importantly, do your employees know what can be claimed and do you have the right processes in place to ensure that there are no tax surprises?
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