Stingy €25 tax relief to cover home working

I DON’T often have a beef with the Revenue Commissioners, who are in my view unusually fair and efficient for a Government agency. But they could be a lot more generous when it comes to the tax relief for people working from home who don’t get an allowance from their employer.

Employers can give us an official Revenue allowance of €3.20 a day tax-free to cover our household expenses like broadband, electricity and heating. If they do, that works out at a decent sum of around €700 a year into your hand.

But what about the many workers whose employers don’t pay this allowance? Well, the way Revenue works out their tax is more than a bit stingy.

Accountants Taxback.com worked out that the average employee on the higher rate of tax could get little more than a miserly €50 if they claimed for €2,000 in working-at-home expenses in this way. And if they are on the lower rate, it could be more like a derisory and extremely unfair €25. (Don’t lower-paid workers incur the same expenses after all?)

Taxback.com suggests that working at home expenses should be treated as flat-rate expense with a set allowance every year. That would give us €166.40 a year if on the lower rate of tax and €333 if on the 40% rate.

It still seems lowish to me and the unfairness remains between lower and higher-rate taxpayers. But it would mark an improvement of 486% on the current system, according to Taxback.com.

WE often point out how few people bother to switch providers for things like TV, broadband and energy, missing out on thousands of euros in savings.

Apparently, even fewer were doing it during the lockdown. Recent research from the Commission for Regulation of Utilities revealed that the number of electricity switchers during lockdown was down 25pc on the same month last year, and the number of gas switchers was down 38pc. This even though a lot of people will be need savings to make ends meet in the looming recession. I had always thought that people are too busy to switch.

But if someone did it for them for free – as many firms offer to do in the UK – that might work better for them, as long as they made the right choices unbiased by any commission they may receive.

Well, this type of service is finally getting started here. Weswitchu.ie, for example, aims to take the hassle out of moving energy providers every 12 months by doing the switching for customers.

You enter a few basic details and each year, when their contract expires, weswitchu.ie moves you to the best energy deal on the market tailored to your consumption profile.

The new free service has already acquired over 1,000 customers, who save, on average, €500 per annum, it says. IF you’re buying online, as many of us were in the lockdown, don’t forget to check if it’s cheaper to select the local currency option when making your purchase.

Amazon.co.uk, for example, prices its products in sterling but it will automatically select the euro option for an Irish debit or credit card.

That seems to make sense. But if you do so you are accepting the euro conversion rate offered by Amazon, which seems to work out pricier than allowing your credit card company to do the exchange for you instead.

The last time we checked, it worked out costing about a fiver more for a £300 purchase. It’s not a huge amount but it’s better to have it in your pocket than Amazon’s.