Work-from-home expenses claimed by only one in ten

The tax-back avenues open to remote workers have been criticised for being confusing. Stock image

Anne-Marie Walsh

October 18 2021 02:40 AM

Just one in 10 people working from home have claimed tax relief on their expenses, worth more than €10m.

New figures from the Revenue Commissioners show nearly 79,000 PAYE workers filed a tax return for last year containing a remote working claim. A spokesperson said almost 790,000 taxpayers filed a tax return and approximately 10pc sought the relief.

Other workers may be getting a tax-free €3.20 a day allowance from their employers, although experts believe this is not being offered to many staff.

A Tax Strategy Group estimated there are 875,000 people working from home, while the Central Statistics Office said 835,200 were mainly working from home at the start of this year.

Although the uptake on tax relief so far is low, it is unlikely to be the final figure because taxpayers have up to four years to claim expenses. Taxpayers can claim relief of 10pc of utility bills and 30pc of broadband, and then get a portion of this based on their tax bracket.

This is set to change to 30pc of these bills that fall due after January 1 next year, following a Budget announcement last week. Marian Ryan, consumer tax manager at Taxback.com, said the system was laborious for people who must gather receipts and calculate days worked remotely, but might get only €100 back.

“The measures brought in last week will double the relief for people to about €200 for those working from home full-time on the higher tax bracket, and to €100 for those on the lower bracket,” she said.

“The average claim is about €2,600, with about €1,000 for lighting, €1,000 for heating, and €600 for broadband.”

She said a flat-rate expense payment would have made the system much easier for people.

Irish Congress of Trade Unions’ social policy officer Laura Bambrick said the current tax relief was inadequate and the application process was complex.

“While increasing the tax relief on lighting and heating bills from 10pc to 30pc addresses our concerns around adequacy, it does nothing to make it easier for workers to apply, nor does it deliver the payback in real time, when the higher utility bills fall due,” she said. “It also continues to put the tax relief out of reach of renters who have utility bills in their landlord’s name.”

She said the ICTU was surprised a Tax Strategy Group paper prepared in advance of the Budget did not consider extending remote working tax relief to the costs of desk hire at a hub.

Ms Bambrick said this was not expected given Government support for growing the regional hub network. She said while this would be a tax-deductible expense for employers, they would not be required to cover the expense for employees. “The compensation for remote working expenses is in urgent need of resolution to ensure the permanent shift to remote work does not erode workers’ rights and conditions,” she said.

A Department of Finance spokesperson confirmed the remote working relief announced last week would not extend to expenses incurred by employees renting desks.

“However, if such costs are paid for by their employer and the costs are incurred wholly and exclusively for the purposes of the business by an employer, the costs may be deducted by the employer in the normal course of calculating the tax liability of their business,” he said.