Taxback.com are calling on the Government to consider introducing a new Flat Rate Expense for the thousands of employees throughout the country that have now found themselves part of a remote working workforce.
The tax refund specialists say that current working from home tax relief arrangements are meagre and that to incentivise and encourage people to make their remote working situation more permanent, a new relief should be introduced, which they say could save the average worker up to €300 per annum.
Taxback.com ran calculations on ten different professions to show how the new FRE allowance could work in practice and how vastly different the value would be to the average worker when compared with the relief already in operation. Taxback.com say that by working from home people will incur some additional costs that they may not yet even be aware of.
The obvious ones are heating, electricity and perhaps broadband expenses. Currently, from a tax perspective, an employer can pay €3.20 a day to their employee to cover these additional costs. This payment is tax free, which means they won’t be deducting PAYE, PRSI or USC from that amount. But it isn’t a legal obligation to do this, however, and in these straightened times, when many businesses are cutting budgets just to stay afloat, Taxback.com say many employers will not be in a position to do so.
Explained their position, CEO of Taxback.com, Joanna Murphy said, "As it stands, if a person works from home, they can apply for some tax relief on the cost of utilities and other expenditures that might be incurred over their working year. The process is a little arduous, with workers having to supply a letter from their employer and collect all relevant utility and other bills. The amounts received at the end, although welcome, are not very much – perhaps on average between €20 - €60 depending on the worker’s salary and other factors."
She continued, "We are advocating simply that a new category of flat rate expenses be included for these workers – this type of relief is already embedded in our tax system, so its roll-out could be relatively straight forward. Essentially, it would mean that people would wind up with significantly more money in their pockets – our estimates suggest the difference could be anywhere from €160 - €300 or more."