The unprecedented spread of the COVID-19 has left many commercial buildings empty, with most of Ireland’s workforce working from their homes where possible. As a result, employees may be entitled to tax relief for their utilities, and the payment of these expenses could also save much-needed cash for employers.
The Revenue Commissioners have longstanding guidance concerning provisions for employees working from home. Given the current circumstances, this may now only have become relevant to many employers and employees alike, as Irish people are finding themselves working from home.
The Revenue Commissioners updated their guidance to include an example of individuals who are advised by the Government to work from home because of the spread of the Coronavirus, and employees in these circumstances can get tax relief.
Given the uncertain nature of the Coronavirus, many individuals are working from home indefinitely now and will suffer increased costs as a result, including light, heat and electricity.
How much can an employee claim?
An employer can make a daily payment of €3.20 to an employee who is working from home to cover expenses such as heating and electricity. This payment can be made without the deduction of income tax, universal social charge and PRSI. In this way, an employer saves on the substantial employer’s PRSI cost, which may be of enormous benefit to an employer who, unfortunately, must make salary cuts to employees.
If the employee has higher costs, they can make a claim online at the end of the year instead, and they will be required to submit receipts to their local Revenue office using MyAccount to do so. Relief will only be given to the extent that the expenses are vouched, and are incurred wholly, exclusively and necessarily in the performance of the duties of their employment.
At Mazars, we have the practical experience and expertise to support our private clients in navigating turbulent and uncertain times. Whether it’s advice you require as an employer or an employee, we are well-positioned to deal with your queries.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars private client tax team below: