Written answers

Wednesday, 31 March 2021

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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99. 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 (details supplied); the measures being taken to address this economic disparity; and if he will make a statement on the matter. [17176/21]

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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127. To ask the Minister for Finance his plans to increase tax credits for persons working from home in future budgets; and if he will make a statement on the matter. [17138/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 99 and 127 together.

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. 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.

This administrative practice has been in place for some time and the choice of whether to make the payment of €3.20 is at the discretion of the employer. The value of relief allowed under the Irish system is already considered sufficient to cover any legitimate additional costs incurred by workers. The level of support allowed also compares favourably internationally: at €3.20 per day up to €16 per week or €832 per annum may be paid tax free. By contrast, the weekly rate in the UK is just £6 per week or a maximum of £312 per annum.

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, 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.

As I announced on Budget day, in addition to these existing measures, Revenue have agreed to allow broadband to qualify for this relief. This apportionment is based on the number of days the person spent working from home in year with 30% of the apportioned value accepted by Revenue as related to work in the home.

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.

Revenue have published detailed guidance on e-working arrangements in their Tax and Duty manual TDM 05-02-13 e-Working and Tax which may be viewed at the following link:

Finally, the national remote working strategy: Making Remote Work, commits the Tax Strategy Group to reviewing the current tax arrangements for remote working in respect of both employees and employers. The Tax Strategy Group will take account of the economic, financial and organisational implications arising from the experience of remote working during the pandemic, and assess the merits of further enhancements for consideration in the context of Budget 2022.

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