Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The 2020 programme for Government contains several commitments related to working from home, including an examination of the feasibility and merit of changing tax arrangements to encourage more people to work remotely. The responsibility for this falls with my Department. There is also a commitment to the development of a national remote working strategy. To that end, an interdepartmental group to consider this area has been set up. Officials from my Department are included in this group, which is chaired by the Department of Enterprise, Trade and Employment.

Regarding the current tax treatment of the costs associated with working from home, the position is that any such costs incurred wholly and exclusively for the purposes of the business by an employer, for example, the provision of equipment, may be deducted by the employer in the normal course of calculating the tax liability of their business. From the perspective of the individual employee, there is no specific tax credit available to employees where they work from home. The consideration of the introduction of any such credit would need to balance a number of factors, including issues of equity, noting that not every worker is able to work remotely or from home for a variety of reasons, including the nature of their work and also the nature of their home environment. However, I am advised by the Revenue Commissioners that where e-workers incur certain extra expenditure in the performance of their duties of employment remotely or from home, such as additional heating and electricity costs, there is a Revenue administrative practice in place that allows an employer to make payments up to €3.20 per day to such employees, subject to certain conditions, without deducting PAYE, PRSI or the USC. Where employers avail of this facility, they are not required to advise Revenue and, therefore, the number of employees reimbursed in this manner is not available. Where employers choose to pay more than €3.20, the excess is subject to a deduction of PAYE, PRSI and the USC.

To respond to a point made by Deputies Canney and Naughten, it is not the case that the only support available is the €3.20. It is up to each employee working from home to decide whether a share of the expense of working from home can be deducted from the tax liability for the year, through the Revenue Commissioners.

The Revenue Commissioners have confirmed that PAYE workers using their primary residence as a workplace during Covid-19 restrictions qualify as e-workers for the purpose of this practice.

Revenue also advises that the provision of equipment, such as computers, scanners and office furniture, by the employer to enable the employee to work from home will not attract a benefit-in-kind charge where the equipment is provided primarily for business use. The provision of a telephone line, broadband and such facilities for business use will also not give rise to a benefit-in-kind charge where private use of the connection is incidental.

I am advised that where an employer does not pay €3.20 per day to an e-worker, the employee retains a statutory right to claim a deduction under section 114 of the Taxes Consolidation Act 1997, in respect of actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of his or her employment. PAYE employees are entitled to claim costs such as additional light and heat in respect of the number of days spent working from home, apportioned on the basis of business and private use. As I announced on budget day, Revenue has agreed to allow broadband to qualify for this relief. The apportionment is based on the number of days in the year the person spent working from home, with 30% of the apportioned value accepted by Revenue as related to work in the home.

I am, therefore, satisfied that the matter raised by the Deputies is being sufficiently considered through appropriate channels, with publication of the various findings in due course, so I do not believe there is a need to accept the amendment.