17 March 2022 
Julia Ascott, Employment Taxes Specialist
Confirmation from HMRC in the latest 'Agent Update' that the easement put in place for home office expenses during lockdown will come to an end on 5 April 2022.
HMRC confirmation:
As UK government restrictions are lifted, working from home is no longer a legal requirement. On 5 April 2022, the following temporary easement put in place during the COVID-19 pandemic will end.
This easement allowed Income Tax exemption and accompanying National Insurance contributions disregard for coronavirus related home-office expenses (where costs are reimbursed by the employer).
This means, we will be going back to the original rules pre-covid - as follows:
An existing tax exemption under section 316 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA03) applies where an employer provides home office equipment directly and retains ownership of that equipment, and the employee’s private use is not significant. This exemption does not extend to employer reimbursements for employee expenditure on home- office equipment.
Tax relief is also available under section 336 ITEPA03 where an employee incurs a cost that is ‘wholly, exclusively and necessarily in the performance of the duties of their employment’. The corresponding National Insurance contributions disregard is contained within schedule 3 of the Social Security (Contributions) Regulations 2001.
However, the current rules mean that where an employee buys their own home-office equipment and is reimbursed by their employer, they will currently not be entitled to tax relief. This is because the expense incurred puts the employee in a position to perform their duties and is therefore not incurred in performance of their duties.
This principle applies to the tax treatment of employee expenses generally.
What's the takeaway?
For employees working from home, or under hybrid arrangements, employers won't be able to reimburse the cost of desks, desk chairs, etc without there being a taxable benefit charge on the employee. To ensure minimal tax risk, universities should ensure that major office equipment is provided directly by the university, through procurement.
