The Revenue have updated their guidelines on e-working and the treatment of associated expenses. The updates are limited and broadly in line with previous guidance on e-working but do provide some clarity around what is considered e-working for “substantial periods” and the availability of the reliefs in the current environment. This relates to the concept of e-workers/home workers.
E-working is the method of working using information and communication technologies where an employee’s work is carried out independent of location.
Revenue has defined e-working to be where an employee works:
- at home on a full or part-time basis
- part of the time at home and the remainder in the normal place of work
- while on the move, with visits to the normal place of work
The guidance goes on to state that e-working involves:
- working for substantial periods outside the normal place of work
- logging onto a work computer remotely
- sending and receiving email, data or files remotely
- developing ideas, products and services remotely
The guidance previously did not clarify what Revenue considers to be “substantial periods” and they have now updated this for circumstances which we now find ourselves in, with a large portion of the workforce now working remotely for public health reasons by adding the following to their guidance.
“Where the Government recommends that employers allow employees to work from home to support national public health objectives, as in the case of Covid-19, the employer may pay the employee up to €3.20 per day to cover the additional costs of working from home. If the employer does not make this payment, the employee may be entitled to make a claim under section 114 TCA 1997 in respect of vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of the employment”.
In board terms this will permit employees forced to work from home due to the Covid crises we currently find ourselves in, to claim for a tax credit. The below is the specific example which the Revenue have outlined in their guidance.
e-Working calculation for claim by employee
The example below outlines the approach for employees claiming relief for allowable e-working expenses, i.e. expenses that are incurred wholly, exclusively and necessarily in the performance of the duties of their employment.
Eve works 180 days in total during the year, and 90 of these days are from home.
The annual amount paid on allowable utility bills (heating and electricity) is €1,750:
The portion of utility bills that applies to e-working days is:
Allowable utility bills x No. of e-working days
€1,750 X 90 = €432
This amount (€432) should then be apportioned between use for employment purposes and private use.
Revenue are willing to accept that the average proportion of the house attributable to a home office is 10%. Therefore, in this example the amount of e-working expenses that would be “allowable deductions incurred in employment” is €432 X 10% = €43.00 (this is the e-working expense amount due).
Method of claiming e-Working expenses
e-Working expenses can be claimed by completing an Income Tax return. An individual can complete this form on the Revenue website as follows:
- sign into myAccount;
- click on ‘Review your tax’ link in PAYE Services;
- select the Income Tax return for the relevant tax year;
- in the ‘Claim for Tax Credits, allowances and Reliefs’ page select ‘Allowable Deductions incurred in Employment’ and insert the amount of expense at the “Amount” section.
As a claim may be selected for future examination, all documentation relating to a claim should be retained for a period of six years from the end of the tax year to which the claim relates.
Here is a link to the fully recently published guidance on the Revenues website: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-13.pdf
If you would like further details on the supports to date or have specific client queries please do not hesitate to contact us.