Call to replace working from home allowance with flat-rate relief

The Government has been urged to scrap the current working from home allowance and replace it with a simpler flat-rate expense tax relief for remote workers.

The proposed alternative would be more financially beneficial for those working away from the office and would be far simpler to apply for and process.

Joanna Murphy, chief executive of tax refund specialist Taxback. com, said thousands of employees have recently found themselves working from home due to the Covid-19 crisis and therefore now face additional expenses.

She said the current relief arrangements are meagre and do little to incentivise individuals to give greater consideration to remote working over the longer term. The process is also arduous with workers having to supply a letter from their employer and ensure they have receipts for all expenses.

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Easy rollout

“The amounts received at the end, although welcome, are not very much – perhaps on average between €20 and €60 depending on the worker’s salary and other factors. We are advocating that a new category of flat rate expenses be included for these workers. This type of relief is already embedded in our tax system, so its rollout could be relatively straightforward,” said Ms Murphy.

Calculations from Taxback suggests that employees would be able to claim back anywhere between €160 to €300 or more in expenses under a revised flat-rate scheme with many remote workers currently unaware of all that they are entitled to.

As it stands, employers can refund staff €3.20 a day for remote working expenses such as heating, electricity and broadband costs.

“Introducing a flat-rate expense relief equivalent to this €3.20/day payment would really give a welcome capital injection to an employee’s finances and would take the pressure off employers who now find themselves with a whole new remote workforce,” said Ms Murphy.