From 6 April 2012 HMRC is increasing the employee homeworking allowance to £4 per week or (£18 per month).

The homeworking allowances enables an employer may make a payment to a homeworking employee to cover the extra light and heat costs of homeworking, with no requirement to provide any records of any actual expense incurred.

The allowance is £3 for 2011/12, see Homeworking rates and allowances

If the employer reimburses a higher amount supporting evidence is required to prove that there was an actual cost to the employee.

What this means?

Employers are able to pay £4 tax free for any employee with a homeworking requirement.