Dáil debates

Tuesday, 21 September 2021

Ceisteanna Eile - Other Questions

Remote Working

10:15 pm

Photo of Jennifer Carroll MacNeillJennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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10. To ask the Minister for Finance the tax incentives and measures that are currently being considered to support continued remote and flexible working options; the potential impact of the increase of remote working options on the financial services sector; and if he will make a statement on the matter. [44684/21]

Photo of Emer HigginsEmer Higgins (Dublin Mid West, Fine Gael)
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35. To ask the Minister for Finance the tax incentives and measures under consideration to support remote and flexible working options; and if he will make a statement on the matter. [44681/21]

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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38. To ask the Minister for Finance if an urgent review will be carried out of the current 10% rate allowed under the e-working tax relief towards heating and electric expenses incurred from working from home given there is no legal obligation in place for an employer to pay an allowance to recompense an employee directly for working at home; the measures that are being taken to address this economic disparity; and if he will make a statement on the matter. [44814/21]

Photo of Neale RichmondNeale Richmond (Dublin Rathdown, Fine Gael)
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56. To ask the Minister for Finance the tax incentives and measures that are under consideration to support remote and flexible working options. [44880/21]

Photo of Jennifer Carroll MacNeillJennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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My question has two parts, the first of which is to ask what tax or other incentive measures are being considered to sit alongside the proposal to have a right to work remotely. Recognising how many financial services firms moved following Brexit, the second part has to do with the impact on them of changing OECD guidance on permanent establishment and tax treatment if some of their employees have moved back to Britain or elsewhere.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 10, 35, 38 and 56 together.

I thank the Deputies for their questions. I am advised by Revenue that, while working remotely does not entitle PAYE workers to a specific tax credit, a combination of legislative provisions and administrative practices provide relief for remote workers who incur certain expenditure in the performance of the duties of their employment from home. It is acknowledged that remote workers may incur expenditure in the performance of their duties from home, such as additional heating, electricity and broadband costs. Revenue currently allows an employer to make payments of up to €3.20 per day to employees, subject to certain conditions, without deducting PAYE, PRSI or USC.

Revenue has also advised that the provision of equipment such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a benefit-in-kind charge where the equipment is provided primarily for business use. Furthermore, the provision of a telephone line, broadband and such facilities for business use will not give rise to a benefit-in-kind charge where private use of the connection is incidental. Revenue has provided detailed guidance and details of how claims for e-working expenses should be calculated and submitted. All of this is outlined in the tax and duty manual, "e-Working and Tax", which is available on the Revenue website.

Regarding Deputy Carroll MacNeill's broader question on the future of these allowances, I will consider that matter during the budgetary process. As she knows, the Tax Strategy Group, TSG, paper that we published a couple of days ago outlined an international comparison of our rules and grants and how our schemes stacked up versus elsewhere. It also laid out some options for me to consider.

On the Deputy's final point, my Department published just before the summer a publication dealing with the impact of remote working on financial services and the operation of our economy. I do not have a sense at the moment that home working has had any more of an impact on the competitiveness of our financial services sector than it has on any other part of our economy. Indeed, job announcements made in recent days, and even today, show how many large employers and Irish employers have been able to make home working and employment growth happen together. It should be a sign of encouragement to us for what the coming years can bring as we come up with new ways of working away from the office.

We will deal with the matter of support for working from home in the coming weeks. Regarding financial services, while there has been change, I do not currently believe that it has been at the expense of our competitiveness.

Photo of Jennifer Carroll MacNeillJennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank the Minister. I know he is considering these matters in the round for the budget, and we are raising them in that spirit. There is an opportunity to enhance people's lives by continuing remote working, which can reduce costs for employers and free up property, particularly in city centres, for repurposing for residential use, which would be attractive.

In terms of employment and taxes accruing, Ireland has benefited considerably from the relocation of financial services firms. Under regulatory requirements, the permanent place of establishment, where board meetings are held, tax treatments and the place of effective management are criteria in determining which territory has primary taxation rights. The OECD relaxed the rules considerably in January, so the situation has changed over time. My concern is that local tax rules take account of these changes and that we not unduly lose employment in the sector.

Photo of Emer HigginsEmer Higgins (Dublin Mid West, Fine Gael)
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This week, tens of thousands of people went back to the office or other place of work, but not everyone is back in the office yet. Many are continuing to work from home or are moving to a hybrid model, and we need to support them.

In that context, it is important that we acknowledge the increase in utility bills. The Minister spoke about this matter in his initial contribution. Electricity and heating bills in particular have increased due to energy price rises as well as people working from home. Remote working has been positive for rural Ireland, with towns and villages seeing regeneration. It has been positive for the many people who have had better work-life balances and has had a positive impact on the environment due to less time spent commuting.

Given the benefits of remote working, it is imperative that the Government delivers on its promise to make remote working work. What actions will it take to incentivise working from home and keep utility costs down?

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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Larger numbers of people have been working from home and, as a result, businesses have experienced reduced costs for electricity, including lighting, rent and so on. Some businesses have been paying the €3.20 daily rate to their employees. Others may not have been able to or chose not to, and their employees must claim tax back. In light of how the daily rate is set up, though, there is a mismatch, in that employees can only claim back a smaller amount than the €3.20. For example, €3.20 over the space of a year is equivalent to approximately €830 whereas someone claiming tax back may get as little as €200. This mismatch needs to be balanced so that people are not disadvantaged if their employers choose one route over the other.

Photo of Neale RichmondNeale Richmond (Dublin Rathdown, Fine Gael)
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I concur with the points made by my colleagues in response to the Minister's reply, for which I thank him. I emphasise how important it is that, as we conclude the budgetary process over the coming weeks, the Minister and his Government colleagues be truly ambitious in this sphere. The measures that he announced and that are in place are a good start and stand up favourably internationally, but if we are to utilise the opportunities that the pandemic has presented us in many areas, the best opportunity is to ensure that remote working and working from home continue in the positive way that we have seen. The Government's ambition is for 20% of public sector workers to work remotely or from home within a couple of years, but we have to ensure that that is the ambition in every sector. It is vital that we look beyond the status quo. The Minister mentioned a report that had been presented to him this week. It contains a great deal. I ask that he be ambitious and inventive.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Will you be ambitious, Minister?

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Always, a Cheann Comhairle. However, we have to ensure that the ambition of today is also affordable tomorrow. This is a matter that the Government Deputies at least are aware of. I am aware of the importance of how we support the move to working away from the office.

Deputy Moynihan made an important point that I will consider, and I thank him for raising it.

Regarding the contributions made by my party colleagues, I will make two points. As they will agree, it needs the agreement of a protocol between employers and employees that is capable of realising the ambition that Deputy Richmond correctly raised. I am eager to see that ambition being realised.

Deputy Higgins made a point about costs, including additional utility bills. This is an issue not just for the Government, but also for employers. I am sure the Deputy will agree that, if there is additional cost, which there will be in many cases, involved in working from home, the role of the employer in how that cost should be defrayed is a dialogue that needs to happen.

If working environments are changing and there is an opportunity for costs to be reduced, it is not appropriate that all of that additional saving is not made available in some way to defray the costs that can arise from working from home. In terms of the protocol - Deputy Carroll MacNeill touched on the changing financial services - these are the kinds of issues employers and employees need, with Government support, to find a way through.

10:25 pm

Photo of Emer HigginsEmer Higgins (Dublin Mid West, Fine Gael)
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I appreciate both of the points made by the Minister, in particular in regard to the protocol and around the savings business are making and how they need to be passed on to their employees. It is important to make the point that in a lot of cases employers are not necessarily at a point where they can downsize or downscale their offices and, consequently, some of those costs are still there. On the energy costs and bills that are reducing, however, I agree totally that a lot of that should be passed on to employees who are feeling an increase in their household bills.

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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I welcome that the Minister is considering the supports in the context of the budget. Currently, there are two tools available. It depends on which one the employer chooses, which yields different outcomes for the employee depending on which way it goes. Will the Minister ensure employees will not be disadvantaged any longer by a decision being made by the employer? Will he also ensure whatever change is made will yield a meaningful outcome for employees, especially in a climate where there is a such a change and increase in energy costs, in particular heating, which is one of the biggest portions of the cost?

I acknowledge the change made over the past year in regard to broadband. It was a positive move. I ask that that would be further increased and, generally, that the rate of supports would be increased such that people do not end up disadvantaged because of the chosen option of their employer.

Photo of Neale RichmondNeale Richmond (Dublin Rathdown, Fine Gael)
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I am grateful to the Minister for his reply and constant ambition not just in this regard but throughout his entire brief. He rightly speaks about the cost, but straying into the Tánaiste's ministerial brief, we need to look at the potential benefit in this area for Ireland not just economically but socially to make us the best country in the world for people to work remotely or from home. This is the potential the pandemic offers. Every facet Government can do, working with industry, working with an entire societal, has huge tangible benefits not just in an economic sense but in terms of a regional dispersion of our population and improving services, quality of life, family time and everything that goes with it.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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To go back to the issue the Deputies' touched on a moment ago, Deputy Carroll MacNeill made the point about the financial services sector. It is the case that many companies in the services sector have become more profitable and more successful during this period. In the context then of working from home and the additional costs of that, this is an issue employers and employees need to work together on. It is not always the Government which can step in and provide additional money because the additional money we are referring to is the people's money, which is fixed and finite. In many cases, some employers have become considerably more profitable. The issue of the contribution they can make to home working arrangements is a legitimate point, as the Deputy acknowledged.

On the point made by Deputy Richmond in his concluding remarks, which was touched on by Deputy Moynihan as well, in regard to remote working and all of the opportunity that offers for our country, I can remember when I made the decision to go ahead with the national broadband plan. I can remember the decision and the debate in the House when the then Minister, Deputy Bruton, and I made that decision. I dread to think what the debate on broadband would be like now if we were not in the process of rolling it out.

Question No. 11 replied to with Written Answers.