working from home tax credit?

[RedOnion]

I used to work for an employer that gave us all a 500 euro voucher every Christmas. Completely tax free.
It was worth well over 1,000 gross to those on higher tax band.
I've changed jobs now, but there is no vouchers. And no way to claim a tax credit for it. Completely unfair!

This is equivalent to the comparisons being made above.

 

[Tickle]

I used to work for an employer that gave us all a 500 euro voucher every Christmas. Completely tax free.
It was worth well over 1,000 gross to those on higher tax band.
I've changed jobs now, but there is no vouchers. And no way to claim a tax credit for it. Completely unfair!

This is equivalent to the comparisons being made above.

I disagree.

For example, focusing on the last 1000 euro of income of a worker, which is taxed and usc'd at higher rates. The worker receives €480 net from this.
The worker incurs €100 expenses due to working from home. The following are the comparisons being made:

Scenario A. The employer pays the employee €100, and it's not subject to tax or usc. They use this money towards the expenses, so they still have all of that €480 left.

Scenario B. The employee is not reimbursed by their employer. Out of their last €480, they have had to pay their expenses and now they only have €380. The worker must claim it back from Revenue.

Scenario C: Doing without option A or B. The employee is down to €380 after their expenses and is €100 worse off that A or B. If their salary was €208 higher, they too would have €480 left after taxes and usc.

 

[Sunny]

What tax credit, there is no tax credit!

This post will be deleted if not edited immediately relax. They are talking about introducing/changing tax credits/relief to encourage working from home to stop everyone rushing back to the office. Don't get your pants all in a twist if it is called a tax credit or tax relief.

 

[Sunny]

I used to work for an employer that gave us all a 500 euro voucher every Christmas. Completely tax free.
It was worth well over 1,000 gross to those on higher tax band.
I've changed jobs now, but there is no vouchers. And no way to claim a tax credit for it. Completely unfair!

This is equivalent to the comparisons being made above.

I still get that. Don't tell the wife though.

 

[torblednam]

This post will be deleted if not edited immediately relax. They are talking about introducing/changing tax credits/relief to encourage working from home to stop everyone rushing back to the office. Don't get your pants all in a twist if it is called a tax credit or tax relief.

Those sort of distinctions are what some of us unfortunately can get bogged down in, in our day jobs...

 

[Ndiddy]

Can you claim for broadband too or just elec/gas?

 

[torblednam]

Can you claim for broadband too or just elec/gas?

My response to that (and I’ll be claiming relief for 5 months + of full time home working) is that this is just common sense.

I intend to estimate how much my broadband cost increases by.

I’ve got “unlimited” high speed fibre BB, so the additional cost of my BB on account of my home working is a big fat zero, it’d be plain disingenuous to assert otherwise.

If I was going to downgrade or get rid of my BB except for the home working requirement, or if I had to upgrade my service for it, then that’d be different.

Having said all that, if a person was to claim X/365 x some modest % of their BB I don’t think anyone is going to argue the toss with them over €20 - €40 of tax...

 

[PaxmanK]

This is confusing.
Can a PAYE worker who has been forced to work from home for 3 months get money back from revenue, if their employer does not pay them any extra for working from home?

If so how do they go about getting this money?

I think that is the situation 90% of the workforce are going to be in.

 

[messyleo]

I had to take out new broadband at €50 p.m. in mid March because of working from home - I previously used a cheap mobile broadband package at a a tenner a month - so I was hoping to claim tax relief on more than 10% of the cost of the broadband (ideally the extra cost of €40 p.m.) given it was wholly incurred for WFH - if I can document the start of the new contract in mid-March to coincide with when I started working from home, do you think this would be acceptable?

 

[torblednam]

This is confusing.
Can a PAYE worker who has been forced to work from home for 3 months get money back from revenue, if their employer does not pay them any extra for working from home?

If so how do they go about getting this money?

I think that is the situation 90% of the workforce are going to be in.

It really isn’t confusing. Stop and forget whatever you have seen that has confused you. It may be a bit involved, but there's nothing confusing about it.

Your employer can choose to pay you a tax free amount of UP TO €3.20 per day, and it's well established that this would be by far the most attractive thing financially for an employee.

If your employer doesn't pay you any allowance for working from home, then you just have to forget the existence of the €3.20 a day thing - it's only relevant if you're getting it!

In that situation you have to make a claim for a tax relief after the end of the year - you'll be able to do it via MyAccount - you probably can't do it for 2019, but as you said there will be hundreds of thousands of people looking to make this claim next year, so you can be pretty sure that Revenue , who have no interest in making a cross for their own backs, will have a systems development for the online service, to allow people to claim, in the same way as they do for medical expenses etc...

What you can claim for is not complicated at all, it's common sense really. The additional cost of utilities etc, due to your direct usage of them in the course of performing your work at home.

It won't be a life altering sum of money, as for a month period it will be 92/365 (or about 25%) of 10% (or whatever the appropriate % of your property is a fair % to attribute to your workspace) of your light & heat bills.

Lets say you're an optimist and reckon your workspace accounts for 20% of your gaff. This means you'd be claiming 5% (i.e. 92/365 of 20%) of your light & heat bills for the year. That is deducted from your taxable income for the year, meaning you get tax relief at your highest rate of tax. Depending on what tax band you are in, that would equate to cash in your hand of either 20% or 40%, of 5% of your utilities for the year. If your utilities are €2,500, that's €25 - €50. And that's based on claiming your home office takes up 20% of your home, which is twice the 10% that Revenue have indicated they reckon is a reasonable estimate.

 

[torblednam]

I had to take out new broadband at €50 p.m. in mid March because of working from home - I previously used a cheap mobile broadband package at a a tenner a month - so I was hoping to claim tax relief on more than 10% of the cost of the broadband (ideally the extra cost of €40 p.m.) given it was wholly incurred for WFH - if I can document the start of the new contract in mid-March to coincide with when I started working from home, do you think this would be acceptable?

If it were me I would definitely be claiming for most, if not all, of that additional €40.

 

[Lisboa]

Revenue's e-working PDF has the formula for calculating relief for allowable expenses for PAYE employees as 10% of;

(€1,750 x No. of e-working days) / 365 days

I work part-time hours at home, 5 days a week, as a PAYE employee. When I do my tax returns next year, I'm not sure if I can apply for this tax relief using the above formula as is, just counting every day as normal, or if I should only use multiples of 0.5 working days. I didn't see that covered in the PDF.

In the end it works out to very little anyway (I think it's 48 cents per full day?!), but I envisage this continuing until the end of the year so sure every tiny bit helps.

Semi-related to that, I also do some independent contractor work from home. Is there a scheme similar to the e-working tax relief scheme for self-employed who are working from home? Or can I just claim using the same rules and formula as above? I'm paid per hour, so for every 7 hours, I would just add 1 day to my calculation.

Revenue say;

If you spend money on something that is for both business and private use, you can claim a deduction for part of the expense. This would include items such as phone bills, motor expenses and rent. You must work out how much of the expenditure was for business purposes and claim a deduction for that amount only.

In my case it would just be the same expenses as the e-working relief is paid for.

 

[Ndiddy]

what bills could we use as proof? is it gas and electric? how about broadband?

does one have to keep bills or would debit on bank statement be enough? I want to change providers but hesitant to move in case I need bills

 

[Tickle]

I've seen 2x increase in electricity consumption compared to same period last year. The only change is that I am now working from home (no kids watching Netflix all day). I will definitely be claiming back all of that increase. It will have cost an extra few hundred euro in electricity by the end of the year.

 

[Opal**]

Do employers not reimburse expenses such as these? Like most people, I'm new to the world of WFH so I'm a little confused as to why submitting a claim to an employer for out of pocket expenses wouldn't be the obvious way to recoup costs. I think I must be missing something very obvious to everyone else...

 

[odyssey06]

Do employers not reimburse expenses such as these? Like most people, I'm new to the world of WFH so I'm a little confused as to why submitting a claim to an employer for out of pocket expenses wouldn't be the obvious way to recoup costs. I think I must be missing something very obvious to everyone else...

Earlier post explains sone of this:

working from home tax credit?

how do you apply for this and has anyone succeeded getting back form revenue? what proof is needed?

www.askaboutmoney.com

 

[DB74]

I would just like to throw a small spanner in the works here, forthose who plan to claim this creidt AND who have been receiving the TWSS

Anyone who has been receiving the TWSS from their employer will most likely have a (potentially significant) personal tax liability for the 2020 tax year. This is due to the fact that the TWSS was paid to employees without deduction of any payroll taxes

In my opinion, Revenue will not seek to chase this money unless the taxpayer in question actively submits a tax return for the 2020 tax year voluntarily. I think the political fallout from such a move will not be worth the hassle

In the vast majority of situations, the tax liability on the TWSS will far exceed any tax relief available via the working-from-home tax credit so it may be more worthwhile in NOT claiming this credit. The same logic may even apply to claiming tax relief on medical expenses etc

This obviously doesn't affect people who already have to submit a tax return (eg company directors, people with rental income etc) but for the ordinary PAYE taxpayer with no other income it is worth considering

Now obviously Revenue may insist that they want a tax return from everyone who has received the TWSS but I personally think it's unlikely

 

[torblednam]

Do employers not reimburse expenses such as these? Like most people, I'm new to the world of WFH so I'm a little confused as to why submitting a claim to an employer for out of pocket expenses wouldn't be the obvious way to recoup costs. I think I must be missing something very obvious to everyone else...

Have you read the thread? Employers can pay up to 3.20 per day, on an unvouched, no questions asked basis.

They can also pay whatever's reasonable, on a vouched, questions very much asked, basis.

What it appears you may be missing, is that there's large swathes of employers with zero interest in doing either of the above-mentioned.

In that instance, the only source of financial recompense available currently is a claim for a deduction against one's income, with a consequent reduction in one's income tax and, all other things being equal, a tax refund.

 

[Opal**]

Have you read the thread? Employers can pay up to 3.20 per day, on an unvouched, no questions asked basis.

They can also pay whatever's reasonable, on a vouched, questions very much asked, basis.

What it appears you may be missing, is that there's large swathes of employers with zero interest in doing either of the above-mentioned.

In that instance, the only source of financial recompense available currently is a claim for a deduction against one's income, with a consequent reduction in one's income tax and, all other things being equal, a tax refund.

Thanks for clearing that up as it actually wasn't completely clear from the thread (which I did read btw ). I naively assumed I wouldn't be at a loss through working from home but it looks like it may not be straightforward when I go to submit an expenses claim.

 

[jim]

Thanks for the info in this thread. Can i just clarify...if ones employer doesnt do the €3.20 thimg then you can claim against your own income tax bill. How do you calculate how much you can claim? Is it that you estimate size of office versus rest of house? Then apportion which bills?(electricity, heat, bbroadband)? And further apportion by number of days in the yr worked from home?

How does revenue challenge this? How do they assess reasonableness of office size?

Example:
Office is 20% of house.
Annual electricty and bb is say €1600
Wfh 170 days in yr
Claim = 170/365X1600X0.2=€149

Is this correct in theory?