Remote working

Updating your expense policy for remote workers

Implementing a sharp eye on reviewing, enforcing, and enhancing remote-working expense policies

As more employers implement working from home policies to help protect the health of their employees, some important changes need to be made.

An expense policy review is required to make sure that all existing company policies and responsibilities are amended to reflect the needs and requirements of remote-working employees.

As part of this review, finance professionals need to provide clear guidelines on employee expenses - what can and can’t be claimed when working from home.

Here’s a look at how to update your policy.

Review your existing policy

If your existing policy doesn’t explicitly cover remote working then it needs to be added and updated. And if it does, amendments are likely to be required as working from home becomes a requirement rather than an option.

Reasonable agreements need to be made to ensure that employees are not financially hit by the new arrangements while also balancing the potential cost benefits of workers not having to commute.

Any changes or updates made to company rules should be clearly communicated and form a part of a remote working policy guide that covers all of the main employer responsibilities.

What are homeworkers allowed to claim?

Homeworkers should be able to claim any additional costs that are incurred solely for business purposes. Expenses that are the same irrespective of where the person is working, should not be included.

The challenge for finance teams is trying to differentiate between these two categories.

Here’s a look at some of the main areas:

Office equipment

If remote working requires additional equipment or furniture to be bought, these costs may need to be reimbursed. This may be for the purchase of an office chair, first-aid kit or a software license that’s required for business use.

The case has to be made that these costs are necessary. Most people will already have the basic infrastructure required for remote working - laptop, desk area, and phone. Employers can also look to transport existing infrastructure to the worker’s home.

Stationery and office resources

If employees don’t have access to a workplace to stock up on paper, envelopes, ink cartridges, etc then these costs need to be covered by an expense policy.

Depending on the length of the time remote working policies are going to be in place, employers can also look at the relative costs of sending out office supplies to remote workers.

Heating/electricity

If an employee pays out additional heating and energy costs as a result of remote working, these should be reimbursed. These costs are only legitimate if they are over and above the normal running costs that would be incurred if the person was in the workplace.

Phone bills

If a homeworker’s landline is being used for work calls then costs need to be reimbursed. Itemized bills should help to make sure that business and personal calls are kept apart.

If remote working is for an extended period, employers can consider the option of setting up a designated phone and broadband connection to keep costs completely separate.

Broadband

For most homeworkers, there will be no additional costs from using their broadband connection for work purposes. Claims may be valid, however, if a service has data limits or data ‘throttling’, where services are reduced above a certain usage level.

Where this is the case, agreements need to be made to determine what is reasonable reimbursement for any additional costs or limitations to a service.

Home insurance

Some home insurance policies will include exemptions for anything that is deemed to be for “business or professional purposes”. For full coverage, a homeworker may need to take out a dedicated business policy.

Any additional costs will need to be reimbursed. Checks need to be made to ensure that any business-owned equipment that’s being used by the homeworker, such as a laptop, is not already covered by the employer’s insurance.

What are homeworkers not allowed to claim?

Policies for homeworkers should not cover any costs that would be incurred irrespective of where the employee is working at home or in an office. This includes:

  • Mortgage payments
  • Rental costs
  • Property maintenance costs
  • Water rates - unless metered
  • Food/drink - unless provided free/subsidized in the workplace

How to manage and monitor homeworker expenses

With finance teams also operating remotely, the use of digital tools means expense management can continue as normal. Any reliance on paper documents needs to be reduced with claims handled digitally.

A cloud-based approach to expense management allows remote finance teams to continue managing and monitoring costs, with real-time access to submitted claims. The use of a smartphone app creates a fully paperless operation.

For finance teams operating a paper-based system, claimants can be given instructions on how to start submitting information digitally. Paper receipts can be converted into digital images using a phone camera and sent as email attachments.

Creating or designating a single email address or online storage account where all of the claims are sent to will help to keep the process manageable for a remote working finance team.

What are the tax implications of remote working?

As part of the update process, finance teams need to check out how homeworker expenses are treated by the relevant tax authorities.

It’s a complex area with the tax authorities themselves looking to provide clearer guidelines. With home working now required, as opposed to an optional arrangement, it could change the way that expense costs are handled.

Working together - need more help?

With our businesses facing such unprecedented challenges, this is a time for companies to be working together. If there’s any help or advice you need on adapting your expense process for remote working, we can help to provide support and guidance.