KILDARE employees who work from home could be missing out on tax relief worth hundreds of euro, according to Taxback.com.
With numbers growing every year, the firm has said that – based on anecdotal experience with clients – the vast majority of these workers are unaware of their eligibility to claim tax relief on expenses incurred while working from home.
According to the 2016 Census figures, 3,796 people in Kildare said they worked mainly at or from home.
“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,” said Taxback.com CEO Joanna Murphy.
“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 3,700 people in Kildare 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.”
Ms Murphy noted that the obvious costs are heating, electricity and perhaps broadband expenses, explaining that 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,” she said. “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 if they want to cover this cost.”
Even if your employer doesn’t pay the €3.20 these expenses are eligible for tax relief – tax can be claimed back on them. Any claims will have to be supported with evidence in the form of receipts and possibly a letter from your employer to say you work from home and they don’t 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,” said Ms Murphy. “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!”
According to Taxback.com, home workers and e-workers who from home full or part-time can qualify for this relief. E-working is characterised by working for substantial amounts of time outside your normal place of work, logging on to a work computer remotely, communicating remotely, or developing ideas, products and services remotely.
“Simply calculate your total costs and the amount of your time (as a percentage) you spent working from home,” Ms Murphy advised. “You can then claim the tax break on this percentage of the cost.”