Workers hoping for hefty tax relief for remote working are in for a rude awakening when they submit their tax claim, with some getting as little as 7c a day in a tax refund.
Despite additional heating, lighting and broadband bills associated with working from home, remote workers have only got an average refund of €26.19 from the Revenue Commissioners.
Last year when people were advised to work from home there was talk of up to €3.20 tax-free per day for remote workers. However, accountant Rosaleen Harrison of Tynan Dillon in Ballyhaunis explained this is at the discretion of employers. Employers can pay up to €3.30 per day in expenses to their workers and both avoid paying tax on that amount, but many are unable to do so due to the pandemic.
Employees who are forced to seek reimbursement through the Revenue Commissioners are finding it is almost not worth the time.
Those working from home are entitled to claim tax relief on 10% of their electricity and heating bills for days working at home, as well as 30% of their broadband costs. To calculate the relevant electricity and heat costs, you must calculate allowable utility bills and broadband and divide by the number of e-working days.
“To date, approximately 44,000 workers have submitted a tax reclaim working from home in 2020, with an average refund from the Revenue Commissioners of just €26.19 after they go through a cumbersome reclaim process involving the submission of 12 months worth of invoices for broadband, heating, and electricity,” said Independent TD Denis Naughten
AA Ireland estimated that working from home costed families an extra €210.47 on gas heating and electricity alone in 2020 and that figure did not consider those who rely on oil-fired central heating which has seen an increase in demand by 18% in 2020, or those who are reliant on solid-fuel heating.
“Many more families have seen their broadband costs increase with additional charges for going over their data limits,” said Mr Naughten.
The Roscommon TD is adamant that employers are reducing their operating costs by having staff working remotely and the Government is benefiting through reduced congestion and emissions, but there is no financial incentive for employees to continue working from home.
“Based on the Government’s own spending code, every worker who works at home in 2021 provides the Government with a saving of over 11c a day in carbon emissions alone,” he said.
“So clearly businesses and Government are benefiting from people working from home, but it will be at least 2022 before any proper acknowledgement is provided to such workers.
“Last month the Government promised to review the current tax arrangements for remote workers in its Remote Working Strategy, yet just 44 days earlier the Minister for Finance rejected such a review that I tabled to the Finance Bill.”