Written answers

Thursday, 16 December 2021

Photo of Jennifer Carroll MacNeillJennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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122. To ask the Minister for Finance if he will report on the provision of enhanced tax relief to help remote workers offset higher home utility bills; and if he will make a statement on the matter. [62102/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Programme for Government includes a commitment to facilitate and support remote working. The National Remote Work Strategy aims to make remote work a permanent feature of the Irish working experience in a way that maximises the economic, social and environmental benefits.

As part of the national remote working strategy: Making Remote Work, the Tax Strategy Group (TSG) reviewed the current tax arrangements for remote working in respect of both employees and employers. The TSG paper outlines the effects of Covid-19 on remote working in Ireland, provides an international comparison of remote working tax rules, sets out options for consideration with regard to enhancing the tax arrangements for both employers and employees in respect of remote work and evaluates those options in accordance with the Department of Finance Tax Expenditure Guidelines. The paper is published on the gov.ie website.

In line with Government policy to facilitate and support remote working, on Budget Day, I announced that an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and internet services in respect of those incurred while working from home can be claimed by taxpayers. This measure enhances and formalises existing arrangements that are currently operated by Revenue on an administrative basis and its legislative aspects are being provided for in Finance Bill 2021.

The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and their marginal tax rate. However, this measure will provide some relief for those with additional expenses arising from working from home and it will support living standards as the economy recovers.

Any amounts reimbursed or to be reimbursed, directly or indirectly to the remote worker in relation to the expenses of working from home by his or her employer should be deducted from the amount of relief being claimed.

Revenue’s online system will enable individuals claim tax relief in real time as they pay for these costs throughout the year. The enhanced relief will apply for the year of assessment 2022 and subsequent years.

As the Deputy will be aware Budget 2022 also included a substantial income tax package that will be of benefit to everyone who pays income tax and aims to help citizens when prices are rising.

The Deputy may also wish to note that the Government recently approved the establishment of the Electricity Costs Emergency Benefit Scheme under which a payment of €100 will be made to each domestic electricity customer as a once off measure to mitigate the effects of the unprecedented rise in electricity prices on domestic electricity customers.

Photo of Matt CarthyMatt Carthy (Cavan-Monaghan, Sinn Fein)
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124. To ask the Minister for Finance if recommendations that arise from the proposed review into extending section 664A of the Taxes Consolidation Act 1997, to include agricultural contractors for the purpose of providing them similar status as farmers regarding the carbon tax on green diesel, will be implemented prior to the relevant increase in carbon tax taking effect in May 2022. [61889/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The present position is that agricultural contractors are not entitled to avail of relief from increases in the carbon tax on farm diesel under section 664A of the Taxes Consolidation Act 1997. This is because farming, which is defined in section 654 of the Taxes Consolidation Act, requires the occupation of farmland. Agricultural contracting does not involve the occupation of farmland. The measure is specifically targeted at the farming sector to address the particular problems faced by family farms.

My officials met with contractors' representatives in December 2019 and advised that my Department was intending to schedule a review of the scheme (and related aspects) in the context of a wider report on agri-tax reliefs and the Government's Climate policy.

The onset of the Covid-19 pandemic in the intervening period caused the review to be deferred and it has yet to take place. In the meantime, the status quo has remained in relation to the application and scope of section 664A. My Department is hopeful that the way will be clear for the promised review to be carried out, most likely in the first half of 2022.

It should also be noted that, currently, those who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.

Finally, and as the Deputy will appreciate, decisions regarding taxation measures are made having regard to the annual Budget and Finance Bill processes, the sound management of the public finances and my Department's Tax Expenditure Guidelines. Furthermore, I must also have regard to ensuring that any tax measures are consistent with the need to meet our Climate Action Plan targets.


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