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Tax Code

Dáil Éireann Debate, Wednesday - 19 January 2022

Wednesday, 19 January 2022

Questions (350)

Seán Canney

Question:

350. Deputy Seán Canney asked the Minister for Finance his plans to put in place a tax regime which properly reflects the costs that persons working from home incur in terms of electricity, heat and broadband; and if he will make a statement on the matter. [2042/22]

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Written answers

The Programme for Government includes a commitment to facilitate and support remote working. The National Remote Work Strategy aims to make remote work a permanent feature of the Irish working experience in a way that maximises the economic, social and environmental benefits.

As part of the national remote working strategy: Making Remote Work, the Tax Strategy Group (TSG) reviewed the current tax arrangements for remote working in respect of both employees and employers. The TSG paper outlines the effects of Covid-19 on remote working in Ireland, provides an international comparison of remote working tax rules, sets out options for consideration with regard to enhancing the tax arrangements for both employers and employees in respect of remote work and evaluates those options in accordance with the Department of Finance Tax Expenditure Guidelines. Among other things, the paper acknowledged that employees may experience costs that they would otherwise not incur due to remote working such as additional heat, electricity and increased broadband reliance. However, it also pointed out that this was balanced by potential savings associated with working from home such as reduced commuting costs, as well as potential improvements in employees' work/life balance and reduced commuting time. The paper is published on the gov.ie website.

In line with Government policy to facilitate and support remote working, as part of Budget 2022, I announced that an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and internet services in respect of those incurred while working from home can be claimed by taxpayers. This measure enhances and formalises existing arrangements that are currently operated by Revenue on an administrative basis and its legislative aspects were provided for in Finance Act 2021.

The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and their marginal tax rate. However, this measure will provide some relief for those with additional expenses arising from working from home and it will support living standards as the economy recovers.

Any amounts reimbursed or to be reimbursed, directly or indirectly to the remote worker in relation to the expenses of working from home by his or her employer should be deducted from the amount of relief being claimed.

Revenue’s online system will enable individuals claim tax relief in real time as they pay for these costs throughout the year. The enhanced relief will apply for the year of assessment 2022 and subsequent years.

As the Deputy will be aware Budget 2022 also included a substantial income tax package that will be of benefit to everyone who pays income tax and aims to help citizens when prices are rising.

The Deputy may also wish to note that the Government recently approved the establishment of the Electricity Costs Emergency Benefit Scheme under which a payment of €100 will be made to each domestic electricity customer as a once off measure to mitigate the effects of the unprecedented rise in electricity prices on domestic electricity customers.

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