Who is going to pay for costs of working from home?

Tax relief for remote working is derisory, so who is going to foot the bill for utilities?

In its “Making Remote Work” strategy the Government set out a number of actions it intends taking.

In its “Making Remote Work” strategy the Government set out a number of actions it intends taking.

 

For years, many employers said it couldn’t be done. The Covid-19 pandemic, however, has put paid to the reservations employers previously expressed about allowing large numbers of their staff to work from home.

Not only can people work at home effectively, in many instances they are also working more efficiently. And many of them want to keep doing this.

Now the Government is looking to establish more of a formal legislative framework to what, up until now, has been a temporary response to a global pandemic.

But will this really compel employers to allow employees work remotely on a permanent basis? And if they do, who’s going to foot the bill for all those heating and broadband bills?

Earlier this month the Government signalled a major step change in employment legislation, aimed at improving the rights of those who want to work from home. In its “Making Remote Work” strategy it set out a number of actions it intends taking, including mandating that remote working should be the norm for up to 20 per cent of public-sector employees; legislating for the right to request remote working; developing a code of practice for the right to disconnect; and a review of tax reliefs.

It was greeted by some as forever revolutionising the working landscape in Ireland, but it may yet be a case of “plus ça change, plus c’est la même (presque) chose”.

First off, the Government is not enshrining the right to work at home in legislation. Rather, it is legislating for the “right” to be able to ask to work from home. Which is a completely different thing.

At present, employees can ask to be allowed to work remotely, but there is no formal legal framework to allow them to do so. What the new strategy is proposing is the creation of such, which may be akin to that provided for by the Europea Union’s Work Life Balance Directive, which is due to be introduced in Ireland by August 2022. It allows parents with children under the age of eight to request flexible working arrangements, but, importantly, also allows employers to refuse them. It would be a great surprise, then, if the new remote-working framework didn’t follow suit. As employment lawyers at Arthur Cox wrote in a recent note, “It is unlikely that the legislation will provide for an unequivocal right to work remotely.”

After all, while remote working has proved fruitful for many, other employers are only too keen to have their staff back in the office. And granting permission for employees to work remotely during the pandemic is no indication that this should be a permanent arrangement once the pandemic eases.

Employment contracts

If you check your employment contract, for example, it will indicate where your normal place of work is and, unless remote working was a condition when you accepted your job, this place of work is likely to be where your company is based.

In terms of employee motivation, many employers may concede to requests from employees; but these same workers may be wary about the long-term costs of running a home office.

If you’ve been leaving the heating or lights on that little bit longer this winter, in the expectation that you’ll be reimbursed through the exchequer, you’ll need to park those illusions.

Yes, the so-called e-working tax relief was enhanced in last October’s budget; it just wasn’t enhanced enough to be of significant benefit to anyone. The relief allows you to claim a portion of your household heat/lighting and broadband bills as a refund on your income tax form. However, the reward for getting all your bills together and working out your rebate is likely to be a derisory €50 or so. Time to put on another jumper then, perhaps.

While those with substantial commuting costs may be faring considerably better – crossing the M50 twice a day, for example, costs almost €1,000 a year – those without such costs may bemoan the heightened household bills they’re facing.

Unsurprisingly then, in a consultation held earlier this year on the Governmnet’s new remote-working strategy, tax and financial incentives featured more than any other issue such as employment conditions or broadband. The common feeling expressed was that the current e-working tax relief is both insufficient to cover work-related costs and too cumbersome to claim.

Now the Government’s subsequent strategy has also taken a view on this, but again, it has stopped short of promising anything substantive.

Rather, it simply said that the Tax Strategy Group will review current arrangements and “assess the merits of further enhancements for consideration” in Budget 2022.

Taxsaver scheme

With a little bit of imagination the situation could become considerably more favourable. What about offering tax relief to those who work from home akin to the taxsaver scheme, which allows tax relief at your marginal rate on bus and train tickets? After all, if you’re working from home you’re not going to be needing this any more.

Or instead of the bike-to-work scheme, introduce a broadband-for-work scheme, which allows you to claim tax relief at up to 40 per cent on the cost of broadband, rather than the tiny allowance that currently applies.

And if you’ve been stuck at the kitchen table for the best part of 10 months – currently shared with your home-schooling children, perhaps – offering some relief towards kitting out a home office would also be welcome.

A submission in the aforementioned consultation suggested a grant to allow people to convert or extend parts of their homes to allow for the creation of dedicated workspaces in attics, garages extensions and garden pods.

The question is whether or not the Government actually has the appetite to actively promote remote working, by putting some money behind it, rather than give it lip service in reports and strategies.

And the jury is out on that one. City and town centres across the country have already been decimated by Covid-19. Does the Government really want to seal their fate by incentivising shoppers and lunchers to stay at home?

Which brings us back to employers. They can currently offer a better financial solution to their remote workers than that currently on offer with tax relief, by giving their staff €3.20 a day, or almost €800 a year, tax free to their employees. And yet, few appear to have done so.

Rhetoric is free, action costs money. It’s just not yet clear if anyone wants to foot the bill.

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