Employers can contribute up to €3.20 per day to cover an employee’s additional costs of working from home, such as electricity, heat and broadband, without triggering a charge to benefit-in-kind (BIK).
Many employers cannot afford to make such a contribution in the current economic climate so Revenue have introduced a concession, commencing in the tax year 2020, that will apply for the duration of the pandemic.
Employees not in receipt of a contribution from an employer can make a claim for tax relief directly from Revenue:
- Equivalent to 10% of the cost of electricity and heat as apportioned over the number of days worked at home over the year plus
- Equivalent to 30% of the cost of broadband apportioned over the number of days worked at home over the year.
If a couple are both working from home the cost should be split based on the amount paid by each person.
Employees must retain their utility bills that relate to their claim for six years in case Revenue query it.
It is advisable to seek a letter from your employer confirming the period you worked from home.
Working from home does not affect an employee’s eligibility for CGT relief if working from the principal private residence.
An employee working from home cannot claim tax relief for the purchase of work-related equipment such as computers and office furniture. However, the employer can provide such equipment to the employee and a BIK charge will not arise so long as private use is minimal.
The tax refund will be paid to the employee’s bank account after the 2020 Income Tax return has been filed on ROS via MyAccount service.