Working from home tax reliefs

A number of tax measures exist for remote workings. These will be of interest to employers and individuals generally and especially to employees having to work remotely because of Covid-19. These include:-

1. Reduced exposure to income tax, PRSI and PRSI for individuals with company cars,
2. A daily tax-free payment payment of €3.20 to full and partime workers,
3. Tax-free reimbursement of certain home utility costs, and
4. The tax-free provision of computer hardware and software for business use at home.

Where an individual continues to undertake business travel as usual in a company car, the usual BIK rules apply. In other situations, such as with the restrictions on movement due to Covid-19, the tax rules are relaxed.

This situations are:-

• The employee has no access to the company car,
• The employee has access but private use is prohibited and the vehicle is not used, or
• Any other situation where there is limited or reduced business mileage and personal use is limited. BIK continues to apply, however, liability to income tax, PRSI and USC is calculated using hypothetical business mileage. The hypothetical mileage is the business mileage travelled in January 2020.

A payment of €3.20 per day may be made without income tax, PRSI and USC to individuals performing duties at home during normal working hours.

Employees, who can be full-time or part-time, must be e-working which means:-

• logging onto a work computer,
• sending and receiving email, data or files, or
• developing ideas, products and services.

Certain legal requiements must be met and records must be maintained to access this relief.

The Revenue Commissioners allow a further tax-free payment of 10% of the cost of utility bills although claims of up to 25% of such costs can be made in practice.

An employer may also cover the cost of providing equipment and facilities without income tax, PRSI and USC including:-

• Computers and peripheral hardware
• Remote working and tele-conferencing software
• Telephone, mobile and broadband and
• Office furniture.