Work from home allowance paid by employer

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SomeRandomer

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Hi, quick question re the wfh allowance payable by an employer. If a person is for example an IT contractor with a one person limited company, and is an employee of that company being paid a normal salary, can the company pay the employee the EUR 3.20 per day wfh allowance as a one off payment at the end of a year? If so can it be back-dated if the employee has been working from home for the past 3 years?

I searched the forum and can't find any good answers on this. A web search throws up this page on the revenue.ie site:

Allowance paid to you by your employer

Allowance paid to you by your employer
www.revenue.ie www.revenue.ie

This page states:

If you are a remote worker, your employer may pay you up to €3.20 per day without deducting:​
I read somewhere else that this allowance is up to a maximum of EUR 768 per year, so am I wrong in thinking the employee can receive this allowance tax free from their employer?

Tia.
 
Yes afaik, the employee has been working from home for the past 3 years.
I think my confusion is coming from different things I'm reading, whether the company can just pay the employee the EUR 768 or if the employee has to tot up all their bills with the appropriate calculation and claim it back via revenue.ie.
 
If the employer doesn't pay the €3.20 allowance then the employee can claim a credit via their personal tax return using the calculation mehtoid, you can't have both

When you say employee, are you actually talking about a proprietory director?

I would personally have my doubts that the situation you describe satisfies the WFH criteria. I don't think you can claim the allowance if the normal place of business for the employee is the employee's home. AFAIK the employer would have to have a proper place of business which doesn't seem to be the case here

You can of course include a charge for Light & Heat exps and Broadband exps in the accounts of the company. If the director paid for these expenses personally then the company could re-imburse the director for these expenses.
 
If the employer doesn't pay the €3.20 allowance then the employee can claim a credit via their personal tax return using the calculation mehtoid, you can't have both

- Yes that's my understanding. I guess my question is can the EUR 768 per year be paid by the company to the employee without the employee having to claim it via their personal tax return.

When you say employee, are you actually talking about a proprietory director?

- Yes the employee is a director of the company, it's a one person limited company owned fully by the employee.

I would personally have my doubts that the situation you describe satisfies the WFH criteria. I don't think you can claim the allowance if the normal place of business for the employee is the employee's home. AFAIK the employer would have to have a proper place of business which doesn't seem to be the case here

- When I say employer I mean the limited company owned by the employee that he takes a monthly salary from. The client for the limited company in this case has an official place of business, and the employee works 100% of the time directly for the client, usually in 12 month contracts. The employee has been wfh for the past 3 years as opposed to going to the client's office.
 
Still haven't found a good answer on this. To simplify the question, can an employer pay the 3.20 per day (or max 768 per year) wfh allowance to an employee, similar to the small benefit exemption?
 
where is the registered office for the Ltd Company, if tis the same address as your home, then I think it shaky grounds to say you are working from home so get the allowance, when the home is also the registered office of the Ltd Co. do you claim any allowance in Companys books for household exps, light, heat Internet etc. if you do then I would say you cant have it both ways.
 
Thanks, the company's registered office is different to the home address and light / heat / internet has never been claimed from the company.

So is it either or - i.e. either the employee claims the expenses from the company or the company pays an "un-vouched" allowance?
 
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cloughy said:
where is the registered office for the Ltd Company, if tis the same address as your home, then I think it shaky grounds to say you are working from home ..
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The location of the registered office is irrelevant.

The usual place of business is the key variable here.
 
SomeRandomer said:
Still haven't found a good answer on this. To simplify the question, can an employer pay the 3.20 per day (or max 768 per year) wfh allowance to an employee, similar to the small benefit exemption?
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It's impossible to answer this question properly as you've couched it on a false premise, as indicated by your opening post above.
SomeRandomer said:
If a person is for example an IT contractor with a one person limited company, and is an employee of that company being paid a normal salary, can the company pay the employee the EUR 3.20 per day wfh allowance as a one off payment at the end of a year? If so can it be back-dated if the employee has been working from home for the past 3 years?
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Ah ok, well it's not obvious to me as I don't really know a huge amount about all this :)

So is a proprietary director not treated as an employee if they're taking a normal PAYE monthly salary from the company? Afaik they're entitled to the small benefit exemption as an employee, so would they not be entitled to the wfh allowance also?
 
Your question was adequately answered by @DB74 on post #4 above.

Otherwise, I'd recommend you engage professional advice specific to your situation and circumstances.
 
Ok thanks. Just to point out that in post #4 @DB74 states "I don't think you can claim the allowance if the normal place of business for the employee is the employee's home."

However the normal place of business isn't the employee's home, it's the office of the end client they're working for.
 
The company has one client and under normal circumstances would work 5 days / 40 hours per week at the client site, but sicnce Covid the work is being done from home.
 
SomeRandomer said:
The company has one client and under normal circumstances would work 5 days / 40 hours per week at the client site, but sicnce Covid the work is being done from home.
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Again you could probably do with specific professional advice but in the absence of further detail it would appear pretty clearcut that the normal place of business here is your home.
 
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