Have you accounted for remote working? What you need to know

According to a report by the CIPD, around 83% of UK companies now offer hybrid working, with 45% having a formal hybrid working policy. This isn’t surprising, since every business has had to adapt to post-COVID ways of working and shifting employee preferences. Yet despite this mass shift, many still haven’t changed their finance and accounting practices to accommodate for it.

There are a handful of key implications that all businesses with remote and/or hybrid workers should take heed of – from tax compliance and expenses, to onsite efficiency and asset tracking.

Payroll and tax compliance for overseas workers

If any of your team are based outside the UK, or if you’re open to hiring overseas workers in the future, then take note of your tax obligations. Foreign jurisdictions will most likely require separate tax registration and have differing compliance requirements. Overseas employees may be entitled to benefits or protections under their local laws, while dual-location employees may be at risk of double taxation. Finally, you must withhold income taxes according to the employee’s location, not the company’s.

Tracking employee expenses and reimbursement

Depending on the job requirements, you may need to reimburse home office expenses that have come out of the employee’s pocket. These may be tax deductible if they meet ordinary and necessary business criteria. While this isn’t a legal requirement in the UK, a failure to accommodate this can negatively impact your talent attraction and retention. Today, employee expectations are increasingly shaped by remote/hybrid working conditions.

Office space

Is your office space still fit for purpose? If you’ve adopted a remote or hybrid working model but have remained in the same office, you could be paying for a space that you aren’t maximising. Consider downsizing to shrink your costs. Depending on your working model and how often your team is on site, you could either downsize to a smaller private office or sign up to a coworking space. Numbers can be managed by rotating office shifts so that there’s always space for those on site, saving money on empty seats that aren’t being filled.

Asset allocation and tracking

Do your remote workers have the equipment they need to complete their jobs from home? Employers adopting hybrid models often overlook or underestimate these costs, which can increase as your business evolves – so be sure to account for this. Secondly, equipment provided to remote employees (e.g. mobile phones and laptops) must be tracked and recorded properly. Asset tracking helps you know where your equipment is, who is using it, and its condition – preventing loss, theft, and unnecessary spending on replacements.

Always account strategically with Nabarro Poole

Adopting remote and hybrid working models can be a key part of your evolution as a business, as long as you properly account for it and adapt your finances to manage and benefit from the changes. At Nabarro Poole, we can help you ensure you’ve crossed all the t’s and dotted all the i’s to adapt for business changes, while keeping your finances efficient and growth ready along the way.

From tax planning to budgeting and more, contact our expert team today for strategic accounting advice geared towards your unique needs.