Working From Home (“eWorking”) – What can I claim back?


Working from home / Remote working / eWorking was becoming more common in 2020, however it became mandatory for most of us due to COVID19. While the virus mainly brought negativity into our lives, one upside is that most of us can now benefit from tax relief because of our home becoming our office. I’ll explain what you need to do to claim this tax relief.


What is e-working?


Generally, e-working is regarded as a method of working, using information and communication technology, in which the work-related activity that is carried out is not bound to any particular location.


Revenue define e-working as “working at home either on a full-time or part-time basis; or working some of the time at home and the remainder in the office”. They state e-Working involves:


· Logging onto the employer’s computer system remotely;

· Sending and receiving email, data or files remotely;

· Developing ideas, products and services remotely.


Please note that eWorking does not include employees who, in the normal course of employment, choose to bring some work home in the evening or at weekends, etc.


Conditions of Relief?


· There is a formal agreement in place between the employer and the employee under which the employee is required to work from home;

· An employee is required to perform substantive duties of the employment at home; and

· An employee is required to work for substantial periods at home

Due to COVID19, the conditions are easily met. So what is the actually relief?


The Relief

The employee can benefit from the relief in only one of two ways.

1. The employer can make payments to the employee tax-free up to €3.20 per day; or

2. Employees can claim a tax deduction for their utility bills (heating/electricity etc.)


How to claim the relief?

In order to claim the relief, you will need to do two things:

1. You need to calculate your own relief; and

2. Claim the relief on www.revenue.ie

1. The Calculation

A = Annual Allowable Utility Bills

B = No. of e-working Days


Formula:

A X B

365 Days = €Y X 10%.


Revenue are willing to accept that the average proportion of the house attributable to a home office is 10%. This is why we only claim 10% of the answer we get as the rest of the light and heat is attributable to evenings / weekends / other electronics such as ovens / television etc.


Example:

Mary, due to COVID19 was forced to work from home from 17th March until 1st of September 2020. She has calculated the she worked 100 days at home. Her annual allowable utility bills for that period amount to €4,200.


Mary wants to claim the tax relief so therefore calculates her entitlement:


A = €4,200

B = 100

€4,200 X 100

365 Days = €1,150.68 x 10% = €115

2. Claim the relief on www.revenue.ie


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;

· select ‘Other PAYE Expenses’ in the ‘Tax Credits and Reliefs’ page and insert the amount of expense at the ‘Amount Claimed’ 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.


#workingfromhome #taxrelief #taxrebate #irishtax


If you have any questions, please reach out!

Drop Me a Line, Let Me Know What You Think

© 2023 by Train of Thoughts. Proudly created with Wix.com