Introduction

I am writing to you on behalf of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I) which is the representative committee for the main accountancy bodies in Ireland. It comprises Chartered Accountants Ireland, the Association of Chartered Certified Accountants, the Institute of Certified Public Accountants in Ireland, and the Chartered Institute of Management Accountants. We represent over 50,000 regulated professional accountants working in all areas of financial services and industry in Ireland.

The Department of Business, Enterprise and Innovation’s consultation for the purpose of developing remote working guidance is essential and timely given the fundamental changes to Irish work practice in response to the COVID-19 pandemic.

We note that the main areas of interest in the consultation are health and safety measures, work related stress, employment conditions and data protection. However, tax rules for employee related expenditure and tax rules for travel and subsistence payments also need to be reconsidered, because in our view, the tax rules in place do not support remote work practices.

e-Working

The tax provisions applicable to e-workers should be expanded to include those who work from home at any time, not just those who have a formal agreement in place with their employer under which the employee is required to work from home.

An employer can provide an employee with a tax-free allowance of up to €3.20 to cover certain expenditure incurred by an employee in the performance of their duties from home. This tax-free allowance should be increased for the reimbursement of internet costs.

Employee tax deduction for work related expenses

In cases where an employer is in a position to pay for the provision of equipment, such as office furniture, computers, software and phones on behalf of an ‘e-worker’, a Benefit in Kind charge (and consequently an income tax liability) will not apply, provided private use of the equipment is minimal. However, in circumstances where an employee must purchase equipment for the purposes of carrying on an employment from home, a higher test of “wholly, exclusively and necessarily” must be demonstrated by the employee to claim a tax deduction for their expenditure. This test tolerates no element of personal use by the employee and, as a tax rule, it is complex to understand and unfair in comparison to the straightforward and accessible rules in place to avoid a BIK charge on “e-worker” arrangements. This kind of tax differential should be remedied as many employees are required to work from home and incur the cost of equipment necessary to perform the duties of their employment where the employer is unable to pay for such costs.

Revenue guidance on claiming a deduction for expenses incurred by an ‘e-worker’ in the performance of their duties of employment from home refers to costs “such as additional heating and electricity costs”. Clarity for ‘e-workers’ on their ability to deduct internet costs is required.

Normal place of work rules

An employee’s normal place of work is central to the tax treatment of travel and subsistence reimbursements by an employer to an employee. Over the years, Revenue has held the position that an employee’s home does not qualify as a normal place of work other than in exceptional circumstances and this brings a great deal of complexity to what should be a straight forward matter. The employee’s normal place of work should be based on the facts of where the employee carries out the majority of their duties of employment irrespective of whether that is their home or an employer’s office/workspace.

Electric vehicle charging points

Electric vehicle charging points are provided tax free to employees where provided on site at the employer’s premises. Given that fewer employees are attending the office, consideration should be given to the need for employers to be able to provide and install electric vehicle charging points at employees’ homes tax free.

Conclusion

As observed in the Government’s report Remote Work in Ireland, Future Jobs 2019, remote working has the potential to widen the talent pool across Ireland, stimulate regional growth, lessen accommodation pressures in cities and support the transition to a green economy. It is essential that tax rules to facilitate the practicalities of working from home are put in place to support this important Government initiative.