Sorca Clarke (Longford-Westmeath, Sinn Fein)
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257. To ask the Minister for Finance if consideration will be given to increasing the rate of remote working relief in view of the increase in inflation and cost of living. [49451/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Programme for Government includes a commitment to facilitate and support remote working. As part of the national remote working strategy: Making Remote Work, in 2021 the Tax Strategy Group (TSG) reviewed the tax arrangements for remote working in respect of both employees and employers. The paper is published on my Department’s website.

The TSG paper noted that changes to the tax arrangements for remote working may give rise to issues of deadweight loss and economic inefficiencies, as well as equity issues in the personal income tax system. The paper also noted that in the context of a whole of Government policy to facilitate and support remote working, it may be considered appropriate to enhance or amend the current tax arrangements in order to underline and reinforce public policy decisions in this area.

Taking these factors into consideration, as announced in Budget 2022, the tax arrangements for remote working were enhanced and formalised in line with Government policy to facilitate and support remote working. Accordingly, for the tax year 2022, an income tax deduction amounting to 30% of the cost of vouched expenses for electricity, heat and broadband in respect of those days spent working from home can be claimed by taxpayers.

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 provides some relief for those with additional expenses arising from working from home, and at the same time it ensures that the traditional burden of employer related costs are not transferred from the employer to the State and the wider body of taxpayers. In addition, I would point out that, as the current deduction relates to a proportion of the cost of the relevant expenses, the amount that may be claimed will increase as those expenses increase. There are no immediate plans to further increase the tax relief for working from home.

With regard to cost of living increases, the Government is acutely aware of the cost pressures currently facing households and businesses and has responded to help alleviate some of this burden. A Budget package of €6.9 billion was recently announced, as well €4.1 billion of one-off measures, which included the provision of energy credits for all households. This is in addition to €3 billion of measures that were implemented before the recent Budget.