Tuesday, 13 October 2020
Department of Finance
The 2020 Programme for Government: Our Shared Futurecontains several commitments related to working from home, including an examination of the “feasibility and merits of changing tax arrangements to encourage more people to work remotely”, the responsibility for which falls to my Department. There is also a commitment to the development of a ”national remote working strategy” and to that end, a Remote Working Strategy Inter-Departmental Group has been established. Officials from my Department are included in this group which is chaired by the Department of Business, Enterprise and Innovation. A number of issues are being considered as relevant to these commitments, the results of which will be made public in due course.
In terms of the current tax treatment of the costs associated with working from home, I would note 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 Revenue 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 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 deduction of PAYE, PRSI and USC.
Revenue have confirmed that PAYE workers using their primary residence as a workplace during Covid-19 restrictions qualify as e-workers for the purposes of this practice.
Revenue also advise 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. 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.
Where an employer does not pay €3.20 per day to an e-worker, I am advised that employees retain their statutory right to claim a deduction under section 114 of the Taxes Consolidation Act (TCA) 1997 in respect of actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of their 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.
PAYE workers can claim e-working expenses by completing an Income Tax return at year end. Revenue advise that the simplest way for taxpayers to claim their e-working expenses and any other tax credit entitlements is by logging into the myAccount facility on the Revenue website. I am advised by Revenue that where a deduction in respect of expenses in relation to working from home is claimed in a tax return, the amounts are included in a general ‘Expenses’ field. Therefore, it is not possible to provide the number or value of specific claims in relation to these expenses.
Finally, I am advised that Revenue have published detailed guidance on e-working arrangements in their Tax and Duty manual TDM 05-02-13 e-Working and Tax.