‘Most Irish taxpayers who now work from home will be due a Revenue rebate’

A lot of people are confused about getting ‘working from home expenses’ in the Covid-19 lockdown. How much can we claim? And how do we do it? The news that this is an easily-claimed and valuable relief should be music to the ears for hundreds of thousands of workers in the lockdown, says JOANNA MURPHY, CEO of www.Taxback.com, who explains it all here. There are lots of ways to get back over a thousand euros - on average – in tax rebates if we put our minds to it, says Joanna, who tells us about her hugely enjoyable – and totally free – way to get away from it all.

There’s a bit of confusion out there about claiming expenses for working from home. How much can employers give us tax-free?

The obvious additional costs incurred working from home include heating, electricity and perhaps broadband expenses. From a tax perspective, an employer can pay €3.20 a day to their employee to cover these additional costs. 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, however.

What if my employer doesn’t pay me anything?

Even if your employer doesn’t and/ or isn’t in a position to pay the €3.20, these expenses are eligible for tax relief meaning the ‘home-worker’ can claim tax back on them. Any claims made will need to be supported with evidence in the form of receipts and possibly a letter from your employer stating that you do, in fact, work from home and that they do not reimburse you for these expenses.

How much can I claim if so? Can it be more than €3.20 a day?

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. And even if your employer does reimburse the employee – if the cost run-up exceeds the €3.20-mark,

savvy:

Joanna Murphy relishes her independence tax can still be reclaimed on the difference.

How much tax could we get back overall if we put our minds to it?

Our average Irish customer claims back €1,076. If you’re a worker, and have never claimed before, or if you haven’t claimed in a while, then there’s a really good chance you’ll be entitled to a refund.

Why don’t people claim what they are due?

The two main reasons are lack of awareness and the mistaken belief that the process is too complex or arduous. Thousands of people are unaware that they could be entitled to tax back. Some have just started working for the first time, others might have incurred costs for the first time, such as tuition fees, and simply don’t know you can claim tax relief on these.

How far back can you go?

Four years.

What’s your top three tax-saving tips? 1. Knowledge is power!

The vast majority of taxpayers will be in line for a refund. You can either do your own research and find out what you’re entitled to claim, or you can chat with a tax expert who can help you.

2. Tax day

A lot of people put claiming their tax entitlements on the long finger. To avoid this, why not set aside one day in your calendar every year when you will sit down to claim what you’re owed. You’ll be glad you did!

3. Organise your receipts

This is an important one. It’s crucial to keep receipts, invoices and other documentation for every relief and expense you intend to claim. Set up an organised filing system and add your documents to it throughout the year. You will need to keep your receipts safe for a period of 6 years after you claim your tax back. This is so that if the taxman comes calling, you will be able to account for everything you have claimed. (Note: there’s a useful app for this called Smart Receipts).

What tax breaks are most neglected?

n Medical expenses, which can include doctor and consultant bills, prescriptions, physiotherapy and lots more.

n The Home Carer’s Tax Credit (HCTC), a credit that is worth €1,600 and can be claimed where one parent is at home minding the kids

n Year of Marriage tax relief, which married couples are entitled to claim in the year after they get married

How do we claim back tax?

You can deal with Revenue directly yourself through the MyAccount section of their website. If you want some help and advice on what you can claim, you can use a tax refund specialist.

What’s the most you’ve saved someone at Taxback.com?

Last week, our highest refund was nearly €5,000. It is by no means unusual for that figure to stretch well into five figures.

What did your parents teach you about money?

Money itself does not make you happy. However, a lack of it can certainly make life extremely difficult and stressful! Perhaps the most important lesson that my parents ever taught me was how to be independent. That has remained fiercely important to me.

Are you a spender or a saver?

In truth, I am probably a bit of both. I don’t follow trends, I am not brand conscious and I tend to rally against the status quo. I’m cranky in that way!

I like to spend on experiences rather than goods. A family holiday makes a lot of sense to me, while a designer handbag means nothing at all.

What was your best investment?

My education.

Favourite guilty treat?

This is an easy one. Dime bars are simply unbeatable! But anything with caramel is a close runner up!

Hobby? And how much do you spend on it?

I love long-distance running in the wilds of Hollywood forest in west Wicklow. I feel very privileged to have access to nature in all its glory, a mere stone’s throw from where I live. I get lost in thought when I run and it’s a great reset for me. I change my runners twice a year, which is not expensive!