Tax And Remote Working

Tax experts concur that Revenue rules surrounding place of work are outdated and need to be revised to reflect modern work practices

Grayson Buckley, Crowe: Current tax rules around travel expenses are based on the premise that an employee can only have one normal place of work. Hybrid working means that an employee has two normal places of work – their home and their employer’s premises. The rules forbidding reimbursement of costs for travel from home to work are obsolete, and new pragmatic and workable rules need to be introduced. In addition, there needs to be clarity that an employee’s home office cannot be a place of business for the employer and does not have an impact on claiming principal private residence relief on a sale of a home that an employee has used for work purposes.

Eoghan Farrelly, DBASS: The tax treatment of travel expenses and in-home working costs should be kept very simple. If employers wish to pay a reasonable allowance for days worked from home then this should be tax-free to the employee.

Bruce Stanley, HLB Ireland: Government policy has been moving to encourage remote working and this could have benefits for society. Tax policy should support government policy. Currently, when looking at mileage rates for example, a person’s home cannot be their regular place of work. This directly contradicts the idea of remote working. Also, the working from home allowance is a paltry €3.20 per day. Given the rising energy costs, this doesn’t go very far.

Ronan McGivern, RBK: The approach of Revenue is rooted in the past where employees worked physically in offices from nine to five. This is no longer the case and Revenue rules in relation to reimbursement of expenses need to be updated to reflect the reality of the modern workforce, and that ‘home’ can also constitute a normal place of work. If Revenue is not willing to update their practice, then the government needs to legislate.

Derek Henry, BDO Ireland: There is no one-size-fits-all answer here, so certain qualifying criteria may need to be drawn up and linked back to relative tax treatments. Not all businesses can be run remotely or in a hybrid manner, so finding a balance in providing tax support for remote workers and businesses versus those that are not remote needs to be considered.

Bryan Farrell, Walsh O’Brien Harnett: Making claims for remote working expenses can be cumbersome for employees to claim, especially people who have never had dealings with Revenue or accessed ROS My Account. A flat rate in line with civil service rates may be a more userfriendly solution for employees.

Tom Mahon, Warren & Partners: Currently, the employer can make a tax-free payment to the employee of €3.20 per day towards their expenses. For a typical employee who is working from home two days a week, the amount the employer can pay to them tax free in a typical month is usually in the order of €25.60. It is clear that this is not going to go far in the forthcoming winter, and this allowance needs to be adjusted. Furthermore, in terms of corporate tax residence and central management and control, we think modern work practices need to find their way into modified rules on tax residence to ensure that Ireland is an attractive jurisdiction for inward investment.

Joe Cunnane, TRA Professional: There are tax reliefs currently available for bills such as ESB, telephone and broadband for working from home. At present, 30% of the utility bills are allowable in respect of days worked from home, which is an increase on 2020 and 2021 figures. Revenue needs to look at increasing the mileage rates paid to employees who must travel for business premises to align with increased cost of fuel.