People could be losing out on “free money”.
More than 8 in 10 people in Ireland’s remote workforce could be missing out on up to €100 per year by not claiming Work from Home tax relief, according to new research.
A survey from Taxback.com looked to probe the underutilisation of the tax relief available to those working from home and examine whether taxpayers understood how the relief works in practice.
When asked had they claimed the working from home tax relief, only 17% of remote workers surveyed responded they did.
If you are a remote worker, your employer may pay you up to €3.20 per day tax-free to cover the additional costs of utility and broadband bills.
However, if your employer does not make this payment, you can claim back 10% of the cost of electricity and heat incurred and 30% of the cost of broadband incurred.
This is apportioned based on the number of days you worked at home during the year.
The Taxback.com survey also asked whether respondents knew how this would work if someone lived in a rental property with other people.
It found that 77% did not know that relief can be claimed on one person’s share of the bills in a case like this.
This is as almost half of those who took the survey believed the relief is not available to those in a house share and/or if their names are not on the bills in question.
“We have been advising any clients working from home to collate their bills and claim this relief,” Barry Cahill of Taxback.com said in a statement.
“Anyone not doing so is missing out on ‘free money’, and while the amounts may be small, it’s hard to understand why anyone would not want this money in their pocket instead of leaving it with the taxman.
“Say, for example, someone started working from home full-time at the start of the pandemic (March 2020) and remained at home working full-time for the rest of 2020.
“They would have worked from home for 210 days (42 weeks X 5 days). Their utility bills and broadband bills would have to be apportioned out so that they could decipher their deductible costs.”
Cahill also said that if a person working from home for 210 days with broadband and heating bills of €3,000 were to claim remote worker relief, it would be worth less than €100.
“If you share your bills with someone else, the cost is divided between you, based on the amount paid by each person,” he added.
“With thousands of people in the working from home brigade sharing their accommodation with others, eligibility for this relief for people in this scenario is likely to be commonplace”.
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