Remote workers may be missing out on tax relief

THE vast majority of people who work remotely are unaware of their eligibility to claim tax relief on expenses incurred while working from home.

Taxback.com say people could be losing out on €800 and more at least a year in tax free payments from their employer for things like heating, electricity and broadband.

Joanna Murphy, CEO of Taxback.com explained: ‘These days, it’s common for PAYE employees to work from home on a full or part-time basis.

‘As we move further away from traditional work structures, jobs are becoming more flexible than ever. While there are both pros and cons to working from home, one of the lesser-known benefits of remote working can come in the form of a valuable tax break on the cost of additional home heating, electricity and broadband use.

‘We process hundreds of tax refunds for people in Ireland every day and the number of people who apply for this credit is very small. There are over 12,800 people in Cork currently working from home and based on our own experience, we believe most are simply not aware that they can claim this valuable tax benefit.’

Taxback.com say their experience has been that not only are people unaware of the tax reliefs available, many don’t even realise just how many costs are incurred while working from home.

Ms. Murphy continued: ‘The obvious ones are heating, electricity and perhaps broadband expenses. From a tax perspective, an employer can pay €3.20 a day to their employee to cover these additional costs. With 253 working days in 2019, they could receive over €800 a year. This payment is tax-free, which means they won’t be deducting PAYE, PRSI or USC from that amount. It isn’t a legal obligation to do this - it’s up to your employer.

However, the good news is, even if your employer doesn’t pay the €3.20, these expenses are eligible for tax relief meaning the ‘home-worker’ can claim tax back on them. However, any claims made will need to be supported with evidence in the form of receipts and possibly a letter from your employer stating that you do, in fact, work from home and that they do not reimburse you for these expenses.

‘The allowance or rebate claimed must be reasonable, allowing for the fact that the utilities are for both personal and work and benefit everyone else in the home, so the refund received will be based on only a portion of the overall expenses.

‘And even if your employer does reimburse the employee – if the cost run-up exceeds the €3.20 mark, tax can still be reclaimed on the difference.’

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