The Revenue has updated its guidance on e-working and tax as more and more people working from home with their places of work closed. 

E-working is defined by Revenue 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”.

It includes working at home either full-time or part-time; or working some of the time at home and the remainder in the office. And it involves:

• Logging onto the employer’s computer system remotely
• Sending and receiving email, data or files remotely
• Developing ideas, products and services remotely.

There are tax reliefs, as working from home involves costs which would otherwise be borne by the employer, such as extra heating and lighting costs. But to qualify, there must be a formal agreement in place between the employer and the employee; the duties performed at home must be substantive; and the employee must be required to work for substantial periods at home.

If an employer pays up to €3.20 per day to their e-worker, it’s not counted as income for tax, USC or PRSI. But if the employer pays more, anything above €3.20 is liable as income, not expenses.

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And if the boss doesn’t compensate you for the extra costs, can you deduct €3.20 per day as an expense? No. You must make a claim for actual, vouched, expenses incurred wholly, exclusively and necessarily in the performance of the duties of employment, and Revenue says that test is strictly applied.

An employer may provide such equipment as computers (including laptops or hand-held), printers, scanners, fax machines, and software to enable the e-work, and all will be exempt from Benefit-In-Kind tax. The same applies to telephone facilities provided by the employer, and office furniture. 

All these exemptions depend on the gear being provided “primarily for business use”.

Then there’s the question of what is the “normal” place of work? If an employee works part-time in the office and part-time at home or full-time at home, the normal place of work is the office. 

Unfortunately, that means that “under no circumstances" may expenses be reimbursed tax free in relation to travel between a person’s home and his or her place of work. Likewise, subsistence expenses may not be paid without deduction of tax, in respect of periods spent in an individual’s home.

That one is complicated, says the Revenue, and they advise consulting their Tax and Duty Manual Part 05-01-06. It’s on their website.

Simple? Not really. The complete Revenue guidance is available to download here.