In response to the Covid-19 outbreak in Ireland, the Government has asked people to take all necessary measures to reduce the spread of the virus and where possible individuals are being asked to work from home.
Today Revenue updated their e-Working and Tax guidance manual (i.e. Revenue eBrief No. 045/20) in which it published Government’s recommendation as to how employers can allow employees to work from home.
The content of Tax and Duty Manual Part 05-02-13 has been updated to include:
Revenue has defined e-working to be where an employee works:
The guidance material goes on to state that e-working involves:
The revised Revenue guidance clarifies that the following conditions must also be met:
The guidance confirms that e-working arrangements do not apply to individuals who in the normal course of their employment bring work home outside standard working hours.
It would appear from the updated material, that where there is an occasional and ancillary element to work completed from home, the e-working provisions will not apply.
The revised guidance does not specify what a “formal agreement” between the employer and employee might contain therefore it would be advisable for businesses/employers going forward to consider putting in place a formal structure for employees looking to avail of the e-worker relief in the future.
The guidance material states in broad terms that employees forced to work from home due to the Covid crisis can claim a tax credit.
“Where the Government recommends that employers allow employees to work from home to support national public health objectives, as in the case of Covid-19, the employer may pay the employee up to €3.20 per day to cover the additional costs of working from home. If the employer does not make this payment, the employee may be entitled to make a claim under section 114 TCA 1997 in respect of vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of the employment”.
The revised guidance advises that employers must retain records of all tax-free allowance payments to employees.
In situations where an employee is working from their home but undertakes business travel on a particular day and subsequently claims travel and subsistence expenses, please be aware that if the e-workers daily allowance is also claimed by that employee for the same day, then it will be disallowed and instead, treated as normal pay in the hands of the employee/e-worker i.e. it will be subject to payroll taxes.
Where an employee qualifies as an e-worker, an employer can provide the following equipment for use at home where a benefit-in-kind (BIK) charge will not arise provided any private use is incidental:
There is no additional USC liability imposed on the provision of this work-related equipment to an employee.
Please be aware, however, that laptops, computers, office equipment and office furniture purchased by an employee are not allowable deductions under s. 114 of the Taxes Consolidation Act (TCA) 1997.
e-Working expenses can be claimed by completing an Income Tax return. An individual can complete this form on the Revenue website as follows:
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.
Finally, for employees who meet the relevant conditions and are deemed qualify as e-workers:
For further information, please follow the link: https://www.revenue.ie/en/tax-professionals/ebrief/2020/no-0452020.aspx
It’s very difficult to keep up to date with all the amendments to the Irish tax system so here is a summary of some of the changes to be mindful of in 2018:
1. Annual Membership Fees paid to a professional body (Revenue eBrief 04/18 published on 9th January 2018)
The updated Revenue guidance notes allow an employee to claim a deduction for professional membership fees only in circumstances where:
Where the employer pays the membership fee on the employee’s behalf and either of the above two conditions apply then no Benefit-in-Kind is deemed to have arisen. Subsequently no payroll taxes will arise.
We would advise all employers to ensure the payment of professional membership fees on behalf of employees can be supported in the event of a Revenue Audit.
2. Increase in Employer’s Pay Related Social Insurance from 10.75% to 10.85% from 1st January 2018.
3. Benefit-in-Kind Exemption of Electric Vehicles for 2018.
Finance Act 2017 introduced this exemption for electric vehicles which were available for private use for employees during the 2018 tax year. It is not clear whether or not this scheme will be extended into 2019 which may result in a low uptake in purchasing electric vehicles by employers.
The exemption applies to cars and vans deriving their power from an electric motor.
It does not apply to hybrid vehicles.
4. PAYE Modernisation or Real Time Reporting
From 1st January 2019 all employers will be required to accurately provide PAYE data to Revenue on a Real Time basis.
This effectively means:
For further information, please follow the link:
We would advise all employers to take the time, sooner rather than later, to ensure their payroll processes will be adequate to handle the increased obligations of the Real Time Reporting.
Here is a list of other relevant Revenue eBriefs:
Home Carer Tax Credit – Revenue eBrief No. 009/18 (29 January 2018) https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0092018.aspx
Change in Basis of Assessment – Schedule E – Revenue eBrief No. 127/17 (29 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1272017.aspx
Taxation of payments to craft apprentices by Education and Training Boards –Revenue eBrief No. 126/17 (29 December 2017)
Benefit-in-Kind on use of Company Vans – Revenue eBrief No. 124/17 (28th December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1242017.aspx
Exemption from Income Tax in respect of certain payments made under employment law – Revenue eBrief No. 118/17 (20 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1182017.aspx
PAYE Services: Tax and Duty Manual Updates – Revenue eBrief No. 111/17 (01 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1112017.aspx
Amendments to the Employment and Investment Incentive on 2nd November 2017 – Revenue eBrief No. 99/17 (02 November 2017)