Working from home is now the new norm for most professional contractors.
Ensuring you are aware of available tax reliefs is an important mission for the Team at Fenero. For contractors new to working from home, this article will highlight items of expenditure you may be entitled to claim tax relief on.
This includes any equipment required for you to carry out the duties of your contract role. Common examples of electronic equipment include:
Desktop, laptop and screens
Printer and scanner (or facsimile – still listed on Revenue website)
As with working in an office, Revenue accepts the purchase of certain furniture items which may be required when working from home. Examples of furniture items include:
- Desk, chair, storage or filing cabinets
- Safe (if required to store sensitive documents)
Investing in an ergonomically sound home office may prevent back pain down the road. All purchases should be reasonable in cost. Investing in a lazyboy with a built-in fridge may be questioned by Revenue.
Telephone and Broadband
The requirement for telephone and internet connection is standard when working from home.
The amount you can claim as tax relief however depends on your business vs personal usage. As a general rule of thumb, the following percentages are accepted by Revenue as being reasonable:
- Mobile telephone bills and handset – 50%
- Home telephone costs – 50%
- Home broadband costs – 50%
If any of the above are dedicated specifically for business use, with minimal private usage, 100% may be claimed as tax relief.
Electricity and Heating Costs
For most, working from home on a continuous basis will significantly increase their home electricity and/or heating bills.
The amount which may be claimed should represent the additional cost arising due to you working from home. The two methods of calculating what costs are:
E-Worker Tax Relief
Revenue created E-Workers Relief as a specific provision for individuals who wish to claim for home office related costs.
Under this relief, a flat rate tax free expense claim in the amount of €3.20 per day is claimed. This is an alternative to submitting a claim based on the costs actually incurred.
The benefit of an E-Workers claim is it’s very easy to calculate the relief due; simply multiply the number of days worked at home by €3.20.
Claim a Portion of Bills
The alternative method to E-Workers Tax Relief, is to calculate the additional costs incurred by you as a result of you working from home. You would only use this method if the amount you wished to claim exceeded E-Workers Relief.
This method may be more difficult to calculate however if there are other individuals at home during working hours, for example a spouse, children or housemates. If this is the case, the fact you work from home may only have a marginal effect on increasing the household electricity and heating bills above what they would otherwise be.
Our team of tax and expense experts are on hand to help ensure you claim all the expenses you are entitled to.
If you have any queries on the above, please do not hesitate to get in touch with us on firstname.lastname@example.org or 01-6877400.
Take care and stay safe from all the team at Fenero.