Employment & Payroll

If you receive no compensation from your employer for work related expenses you have paid, you can still claim tax relief for some expenses that relate to working from home. HMRC will usually allow you to claim tax relief if you use your own money for things that you must buy for your job, and you only use these items for work. You must make a claim within 4 years of the end of the tax year that you spent the money.

For example, if you use your own uniforms, work clothing and tools for work it is possible to claim for the cost of repairing or replacing small tools you need to do your job as an employee (for example, scissors or an electric drill), or cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots). A claim for valid purchases can be made against receipts or as a 'flat rate deduction'. However, you cannot make a claim for relief on the initial cost of buying small tools or clothing for work.

Note, you cannot claim tax relief for Personal Protective Equipment (PPE). If your job requires you to use PPE, your employer should either:

• give you PPE free of charge
• ask you to buy it and reimburse you the costs

You may also be able to claim tax relief for using your own vehicle, be it a car, van, motorcycle or bike. As a general rule, there is no tax relief for ordinary commuting to and from your place of work. The rules are different for temporary workplaces where the expense is allowable and if you use your own vehicle to undertake other business-related mileage.

There are a multitude of rules and regulations that you must be aware of when you start employing staff for the first time.

HMRC’s guidance sets out important issues to be aware of when becoming an employer.

1. Decide how much to pay someone – you must pay your employee at least the National Minimum Wage.
2. Check if someone has the legal right to work in the UK. You may have to do other employment checks as well.
3. Check if you need to apply for a DBS check (formerly known as a CRB check) if you work in a field that requires one, e.g., with vulnerable people or security.
4. Get employment insurance – you need employers’ liability insurance as soon as you become an employer.
5. Send details of the job (including terms and conditions) in writing to your employee. You need to give your employee a written statement of employment if you’re employing someone for more than 1 month.
6. Ensure that you register as an employer with HMRC. You can do this up to 4 weeks before you pay your new staff.  This process must also be completed by directors of a limited company who employ themselves to work in the company.
7. Check if you need to automatically enrol your staff into a workplace pension scheme.

When it comes to paying staff, you generally have the choice between using a payroll provider or running your payroll yourself. If you decide to run your own payroll you must choose suitable payroll software. 

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The P9X form is used to notify employers of tax codes to use for employees. The latest version of the form has just been published and shows the tax codes to use from 6 April 2022. The forms states that the basic personal allowance for the tax year starting 6 April 2022 will, as expected, be £12,570 (£12,570 2021-22) and this means that the tax code for emergency use will remain at 1257L.

The basic rate limit will be £37,700 (£37,700 2021-22) except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate. The new form P9X is available online on GOV.UK to download or print.

The P9X (2022) form also includes information to help employers in the new tax year. The document reminds employers that have new employees starting work between 6 April and 24 May 2022, and who provide you with a P45, to follow the instructions at www.gov.uk/new-employee

If you are an employee working from home, you may be able to claim tax relief for some of the bills you pay that are related to your work. 

Employers can reimburse employees for the additional household expenses incurred through regularly working at home.

The relief covers expenses such as business telephone calls or heating and lighting costs for the room you are working in. Expenses that are for private and business use (such as broadband) cannot be claimed. Employees may also be able to claim tax relief on equipment they have bought, such as a laptop, chair or mobile phone.

Employers can pay up to £6 per week (or £26 a month for employees paid monthly) to cover an employee’s additional costs if they have to work from home. Employees do not need to keep any specific records if they receive this fixed amount. 

If the expenses or allowances are not paid by the employer, then employees can claim tax relief directly from HMRC. Employees will get tax relief based on their highest tax rate. For example, if they pay the 20% basic rate of tax and claim tax relief on £6 a week, they will get £1.20 per week in tax relief (20% of £6). Employees can claim more than the quoted amount but will need to provide evidence to HMRC. HMRC will accept backdated claims for up to 4 years. 

These tax reliefs are available to anyone who has been asked to work from home on a regular basis, either for all or part of the week including working from home because of coronavirus.

The statutory sick pay rules were temporarily amended on 17 December 2021. The amendment allows employees to self-certify for a period of 28 days, in place of the normal 7 days. This measure has been put in place to help free up capacity in the NHS and allow GPs to spend more time focusing on the coronavirus booster rollout as well as other impacts brought on by the latest Omicron fuelled coronavirus wave.

The arrangements will remain in place for all absences that begin on or before 26 January 2022. The arrangements also apply retrospectively for any continuing periods of absence which started between 10 and 17 December 2021.  The self-certification period is set to return to seven days for any absences beginning on or after 27 January 2022. GPs will continue to be required to supply medical evidence known as, fit notes, for periods of absence exceeding 28 days.

The current rate of Statutory Sick Pay (SSP) is £96.35 per week for up to 28 weeks. To qualify for SSP, an employee must meet the necessary eligibility requirements. Employers cannot pay less than the SSP but may pay more if they have a sick pay scheme.

The Coronavirus Statutory Sick Pay Rebate Scheme for small and medium-sized businesses and employers, enables them to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The online service closed for new claims after 30 September 2021.

However, following the new Omicron wave, the online claims service is to be reintroduced from mid-January. The government announced before the Christmas break that firms will be re-eligible for the scheme from 21 December 2021 and will be able to make claims retrospectively once the claims service is relaunched.

The scheme covers up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19. Employers are eligible for the scheme if their business is UK based, small or medium-sized and employs fewer than 250 employees. Under the scheme, the Government will cover the cost of SSP for Covid-related absences qualifying employers across the UK.

Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online or a ‘shielding note’ / letter from their doctor or health authority advising them to shield because they’re at high risk of severe illness from coronavirus.