Richard Bruton (Dublin Bay North, Fine Gael)
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197. To ask the Minister for Finance if he has requested the Revenue Commissioners to review the present tax reliefs for remote working with a view to making the relief less cumbersome to operate; the estimated number of persons who have made a claim under this provision in the most recent year for which data is available; the way in which the tax code might better promote such practices into the future; and if he will make a statement on the matter. [56169/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, 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) in 2021 reviewed the 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.

There are a number of administrative and legislative provisions under which employees can avail of tax relief in respect of working from home.

Remote workers may incur certain expenditure in the performance of their duties from home, such as additional heating, electricity and broadband expenditure. Revenue operates an administrative practice which allows an employer to make payments up to €3.20 per day to employees who are working from home, subject to certain conditions, without deducting PAYE, PRSI or USC. There is no legal obligation on the employer to make such payment and the payment is at the discretion of the employer. There is no data on the number of employers or employees availing of this provision as there is currently no reporting requirements to Revenue in respect of same.

Furthermore, as the Deputy will be aware, in the 2021 Finance Act, I enhanced and established, on a statutory footing, a tax relief measure for individual remote workers which was previously operated by Revenue on an administrative basis. The new section (contained in section 114A Taxes Consolidated Act 1997) allows remote working individuals, in respect of 2022 and subsequent years of assessment, to claim 30% of electricity, heat and broadband costs, apportioned on the basis of the number of days worked from his or her home during the year. A legislative requirement for the tax relief provided for by section 114A TCA 1997 is that receipts must be submitted with the claim (i.e. the utility bills must be electronically uploaded).

As the Deputy will appreciate, individuals are, generally speaking, well accustomed to supplying receipts to vouch expenditure in order to claim refunds of monies in other areas. For example, claiming refunds of medical expenses from health insurers are typically done on this basis. A similar model operates for tax refund claims in respect of remote working expenses and, I am advised that, Revenue has sought to make the submission of such claims as easy as possible for taxpayers.

Employees can make a claim for remote working relief in one of two ways:

1. End of year claim - Where a taxpayer claims remote working expenses by completing an Income Tax return at year end, he or she can upload supporting documentation via the Revenue Receipts Tracker. He or she can opt to save the information to Revenue storage where it will prefill his or her tax return to assist in the completion and filing of the return. Valid receipts saved to Revenue storage do not need to be retained by the taxpayer for 6 years.

2. Real-time claim - by using the My Account facility. Revenue advises that the simplest way for taxpayers to claim their remote working expenses and any other tax credit entitlements is by logging into the MyAccount facility on the Revenue website. Revenue has provided a real-time facility available to claim remote working relief for 2022 when the expense is incurred. To avail of the credit in real-time the taxpayer is required to upload the receipt details and a readable image of his or her receipt(s) to the Receipts Tracker in MyAccount at the time of making the claim.

The number of PAYE individuals who have claimed remote working relief to date in respect of 2021 is over 81,800. Regarding self-assessed taxpayers, 2020 is the year for which the latest information is available and approximately 23,300 taxpayer units have made claims for remote working relief on the income tax return form (Form 11) for that year. It should be noted that as taxpayers have 4 years in which to make a claim for the relief, these figures will increase further.

Regarding the 2022 tax year, from available information, around 3,000 PAYE individuals have made real-time claims for remote working relief to date. This figure is also likely to increase between now and the end of the year. However, it is expected that most claims for the relief for 2022 will be made after the end of the year.

It should be noted that Revenue has published detailed guidance on this matter on their website, with comprehensive information available in Tax and Duty Manual 05-02-13 Remote Working Relief together with a short video. The manual is available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-13.pdf

Furthermore, guidance on how to register for My Account is available at: www.revenue.ie/en/online-services/services/register-for-an-online-service/register-for-myaccount.aspx

Overall, I am satisfied with the arrangements in place currently in relation to tax relief for expenses associated with remote working but, in keeping with my Department's Tax Expenditure guidelines, the matter will be kept under review.

Catherine Murphy (Kildare North, Social Democrats)
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198. To ask the Minister for Finance the way in which local authority members may access the bike-to-work scheme in their capacity of elected representatives at local government level; and if he has engaged with the Minister for Housing, Local Government and Heritage in respect of their eligibility for the scheme. [56185/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy’s question relates to the applicability of the ‘Cycle to Work’ scheme to elected representatives at local government level.

Cycle to Work Scheme

Section 118(5G) of the Taxes Consolidation Act (TCA) 1997 provides for the ‘Cycle to Work’ scheme. This scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a new bicycle and associated safety equipment for an employee or director up to certain limits, and subject to certain conditions being satisfied. Revenue have confirmed that reference to the term employee for the purpose of this scheme includes the holder of an office.

Currently, those limits are €1,250 for a bicycle and €1,500 for electric bicycles. The scheme does not apply to motorbikes, scooters or mopeds and safety equipment does not include child seats or trailers.

Under section 118B TCA 1997 an employer and employee may also enter into a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a bicycle and related safety equipment, when certain conditions are met:

1. The bicycle must meet the definition of a ‘pedal cycle’ which means:

- A bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon, or

- A pedelec, being a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilo-watts, of which output is progressively reduced and finally cut off as the bicycle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedaling.

2. The bicycle and related safety equipment must be new and must be purchased by the employer.

3. The bicycle and related safety equipment must be used by the employee or director mainly for the whole or part of their journey to or from work.

4. An employee or director can only avail of the ‘Cycle to Work’ scheme once in any 4-year period, commencing with the date the employee or director is first provided with a bicycle or bicycle safety equipment.

Finance Bill 2022 amendments

I am amending the ‘Cycle to Work’ scheme in the Finance Bill this year to increase the limit on the provision by the employer of a cargo bicycle or e-cargo bicycle and related safety equipment.

The limits that will apply after this change will be as follows:

- The first €1,250 in respect of bicycles and related safety equipment.

- The first €1,500 in respect of electric bicycles and related safety equipment.

- The first €3,000 in respect of cargo bicycles and electric cargo bicycles and related safety equipment.

The Finance Bill 2022 changes, once passed by the Oireachtas, will take effect from 1 January 2023.

Eligibility to the scheme

The cycle to work scheme operates on a self-administered basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation.

When determining whether the scheme is available to an individual, Revenue advises that all employers, including Local Authorities in their capacity as employers, give due consideration to these requirements, including the definitions provided in section 116(1) TCA 1997, which, among others, incorporate a definition of:

- ‘employee’, whose definition includes the holder of an office for the purposes of the general provisions of benefit-in-kind, and

- ‘employment’, which is defined as an employment such that any emoluments of the employment would be assessed under Schedule E, and references to persons employed by, or employees of, a body corporate include any person who takes part in the management of the affairs of the body corporate and is not a director of the body corporate.

It should be noted that by virtue of section 120 TCA 1997, the benefit-in-kind provisions, including the exemption from BIK provided for in section 118 (5G) TCA 1997 relating to the ‘Cycle-to-Work’ scheme, apply to public bodies.

As stated above, an exemption from benefit-in-kind applies in relation to the ‘Cycle-to-Work’ scheme, provided the required conditions are met. However, where an employer-employee relationship does not exist, for example, in the case of the self-employed, students, individuals in receipt of social welfare payments or unpaid volunteers, such individuals do not qualify for the scheme.

Comprehensive guidance material on the ‘Cycle to Work’ scheme can be found on Revenue’s website, in Tax and Duty Manual 05-01-01g, available on Revenue’s website.