Hybrid Workers

Following an upturn in trade, a diamond mine owner was looking to expand their business. They needed five workers in the mine, one in the office above the mine and one in the sales team. Five of the seven successful applicants, Happy, Sleepy, Grumpy, Bashful and Sneezy lived locally and would be working down the mine. Dopey and Doc, who lived some way from the mine, would be filling the other two roles.

It was agreed that Dopey, who was appointed to the office job, could work from home four days a week. Doc’s employment contract stated his home was his workplace as he travelled extensively in his sales role. He was also given a company car but, was not provided with private fuel.

The mine owner agreed to pay all Dopey and Doc’s travel costs from their homes.

Three years later…

Doc’s sales role did not work out and he is now working in the office four days a week. Dopey is only working one to two days a week at home, but the mine owner is still reimbursing their travel costs from home.

HMRC come calling…

HMRC issue calculations for a company car fuel benefit in respect of Doc and are looking to collect tax and NI on the reimbursements made to Dopey.

If only the mine owner had…

Identified their hybrid/home workers/agile working arrangements; reviewed costs reimbursed/met to ensure the correct tax and NI treatment had been applied; and considered associated benefits, such as company car fuel benefit charges. The mine owner and the workers were last heard singing “Hi Ho Hi Ho – it’s off to read Booklet 490 we go!”

If you need any help with employment tax matters, either for the Christmas past, present or the future, please get in touch with us at employmenttaxesteam@unw.co.uk.