Income Tax (Earnings and Pensions) Act 2003 section 316A

Homeworker's additional household expenses

Section 316A provides an income tax exemption for payments made by employers to employees to cover reasonable additional household expenses incurred when working from home under homeworking arrangements.

• Payments by employers for reasonable additional household expenses of homeworking employees are exempt from income tax
• The exemption applies only where there are formal homeworking arrangements under which the employee regularly works from home
• Household expenses are defined as costs connected with the day-to-day running of the employee's home
• Only the additional expenses arising from working at home qualify, not the employee's general household costs