In line with Government advice, due to the current global COVID-19 pandemic, employees, where possible, are working from home at present in order to observe social distancing. Such employees may not be aware of the provisions made by the Revenue Commissioners for “e-Working” by employees, working at home or remotely on a full or part-time basis.
Employers can make a payment of €3.20 to an employee, who works from home, per working day without deducting, PAYE, PRSI or USC. The payment is to cover expenses such as heating and electricity costs. Potentially, it could cover broadband costs. If higher costs are incurred by employees and are reimbursed by the employer, records of the payments must be retained by the employer. Essentially the payment from the employer is tax-free.
Employers are not legally obliged to make such a payment if an employer does not do so, such expenses are eligible for tax-relief meaning the employee who works from home can claim the tax back on same. Any claims made by employees will need to be supported with documentary evidence in the form of receipts and possibly a letter from their employer stating that the employee does in fact work from home and that the employer does not reimburse the employee for such expenses. It must be borne in mind by employees that any claim must be reasonable. As heat and electricity are utility bills which benefit the household, the refund granted will be based only on a portion of the overall expenses paid by the employee.
The Revenue Commissioners have stipulated that employees who work from home will not receive a reduction on Local Property Tax if they use a room in their home to carry out work-related activities.
Also, the Revenue Commissioners have confirmed that if an employee uses part of their home to work, it will not affect their principal private residence relief claim for full exemption from Capital Gains Tax.
The tax reliefs set out above may be subject to change in the coming days, if the Government, as anticipated, announces further measures in response to the Covid-19 crisis.
If you have any specific queries or require advice/further information in relation to the above and/or employment law queries, please contact Dervla Beirne, Solicitor, Keating Connolly Sellors, Solicitors;- [email protected]