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Revealed: The hidden €200m cost of remote working to the taxpayer


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Taxpayers face a hidden cost of more than €200m as thousands of people continue to work from home despite the end of Covid restrictions.

Earlier this week, the Government promoted an aspect of extensive research that shows workers could save more than €1,400 a year by working from home, but the document also reveals the multi-million euro hidden cost to the exchequer.

The taxpayer could see a loss of €110m in fuel duty and VAT receipts brought about by reduced commuting.

The report also says local government faces a further loss of €80m a year in commercial rates.

Commercial rates made up around 30pc of council income pre-pandemic and if offices were to be downsized or closed permanently, this would create a “sizeable impact on council budgets”.

“An estimate of a 5pc reduction in commercial property occupancy due to remote working would cost local councils a total of €80m per year,” the report says.

The report, from the State’s civil service research body, says the Government must also provide €17.4m in working from home benefits.

However it shows that €32m could be saved on leases, as well as potential increases in income tax, less demand for staff accommodation and less money spent on resurfacing roads.

But these benefits are not costed for, with the research instead clearly outlining the €207m loss to the taxpayer.

The Irish Government Economic and Evaluation Service report also shows that businesses that make money from people working in offices, such as petrol stations, catering firms and commercial landlords, “will suffer hardest”.

While many employees have now returned to the workplace, some level of remote working at least has become normal for tens of thousands of people.

The report says that “it is still unknown at this time what the impact of remote working will be on the exchequer”. 

“There are potential costs of €200m per year, although the majority of this is likely to come through a reduction in ‘corrective’ tax receipts, such as excise duties.

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“It has not been possible to estimate all of the potential benefits or costs to the exchequer.”

The report also states that the “benefits” of working from home are “likely to outweigh the costs”.

A spokesperson for the Department of Enterprise said the figure should not be taken at “face value”. 

The €200m figure “does not take into account potential gains from increased income tax revenue, reduced welfare benefit costs, or reduced road traffic accidents so should not be taken at face value.

“The majority of the estimated loss in revenue will come from a reduction in corrective tax receipts, which by their nature are designed to reduce over time as consumption falls.”

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