Employment tax

23 Apr 2021

This guide has been produced by the CIOT to help employees and employers understand the tax implications when employees are working from home.

HMRC has published guidance on how to treat certain expenses and benefits provided to employees during coronavirus (COVID-19).

The CIOT has produced this introductory guide to Statutory Sick Pay (SSP), which includes details of how the rules should be applied in relation to COVID-19. The government guidance on the Coronavirus Statutory Sick Pay Rebate Scheme, which can be used to reclaim employees' coronavirus-related Statutory Sick Pay (SSP), can be found on GOV.UK.

We have also prepared a short article highlighting the tax implications of waiving remuneration.

The Pensions Regulator has produced guidance to provide support for those facing difficult decisions and circumstances as a result of the coronavirus.

Regulations have been laid to prevent an employee from experiencing disadvantage in relation to family-related statutory payments and Maternity Allowance as a result of their being placed on temporary leave under the Coronavirus Job Retention Scheme. More information can be found here .

HMRC have updated the Residence, Domicile and Remittance Basis Manual with a Q&A concerning international tax and coronavirus (COVID-19) at Annex D.

On 20 November 2020, HMRC confirmed that they will accept a virtual Christmas party as an event which is capable of falling within the rules for annual functions. HMRC’s Employment Income Manual (EIM) 21690 has been updated to take account of this and an example has been included at EIM21691.

HMRC published a policy paper on 15 December 2020 outlining a new income tax exemption and NIC disregard for advance payments, or reimbursements, made to employees in respect of the cost of obtaining qualifying coronavirus antigen tests incurred in the 2020/21 tax year. At Budget 2021 the Chancellor confirmed a separate measure will extend this exemption to the 2021/22 tax year. The exemptions do not extend to antibody tests.

In a written statement from the Financial Secretary to the Treasury to parliament on 17 December 2020, the government announced that it will introduce a temporary tax easement on cycle-to-work schemes. The tax easement, which was reaffirmed by the Chancellor in Budget 2021, temporarily removes the ‘qualifying journeys’ condition for employees who joined and received their cycling equipment on or before the 20 December 2020, will remain in place until 5 April 2022. Full details of the easement are available in HMRC guidance.

At Budget 2021, it was also confirmed that the temporary Income Tax and Class 1 NICs exemption for employer reimbursed expenses that cover the cost of relevant home-office equipment introduced last year will be extended to have effect until 5 April 2022.