The BT Blog #10

Navigating Work from

Home Tax Relief for


Photo: Extra.ie

Guest Post by Marian Ryan, Consumer Tax Manager at Taxback.com

If, like many of us around the country, you have started working from home last year, you will no doubt be familiar with the extra costs that go hand in hand with remote working. Utility expenses such as electricity, heating, and broadband can all creep up with more time spent in the home office.

Here are some tips to help you recoup some of the costs associated with remote working…

A study we conducted in 2020 at Taxback.com found that 89% of remote workers surveyed said their household expenses had increased as a result of working from home. With working from home set to remain a dominant feature of working arrangements into 2021, it’s important that all workers are aware of any reliefs they might be entitled to which could put money in their pockets.

e-Worker Relief – Who can apply?

Firstly, what defines an e-worker or remote worker? In short, if you work at home on a full or part-time basis and you either log onto a work computer remotely, or you develop ideas, products or services remotely, then you are classed as an e-worker for tax purposes. You will also need to have a formal agreement between you and your employer/business partner that allows you to work remotely.

Your employer can make a voluntary payment to you of €3.20 per workday without deducting any PAYE, PRSI or USC. This payment is intended to cover expenses such as heating and electricity costs. If your additional costs are higher than €3.20 per day, your employer can choose to pay these or not. Note that any amount higher than €3.20 per day paid by your employer will be taxed.

There is no obligation on the employer to make this payment and, given the impact of the pandemic, many employers are not in a financial position to provide their employees with this relief.

So, if your employer does not pay this benefit – are you entitled to anything?

The answer is yes. You can claim the e-worker’s relief through Revenue. Allowable costs include 10% of your electricity and heat bills incurred (apportioned based on the number of days worked at home over the year) and 30% of the broadband costs (apportioned based on the number of days worked at home over the year).

How can I claim?

Workers must supply a letter from their employer and collect all relevant utility bills. You can calculate your electricity and e-working costs as follows:

To calculate your relevant electricity and heat costs:

  • Multiply your allowable utility bills by the number of e-working days
  • Divide by 365
  • Multiply by 10% (0.1)

To calculate your broadband e-working cost:

  • Multiply your bill by the number of e-working days
  • Divide by 365
  • Multiply by 30% (0.3)

If the cost is shared between two or more people, it can be apportioned based on the amount each paid.

Increase your refund

In truth, this relief isn’t going to set your world on fire in terms of money in your pocket – the average worker will get between €20 – €60 back. But it’s still better in your pocket than with Revenue. And while you’re getting your affairs in order to claim it might prompt you to look at other tax reliefs you might be entitled to – these could really increase the refund you receive from Revenue.

Some of the main one’s taxpayers can claim for include:

  1. Medical Expense Relief – Taxback.com stats show that only approximately 4 in 10 Irish people claim tax relief on the cost of their medical expenses. If you have paid for eligible health expenses you will be entitled to claim relief on them at your standard rate of tax – 20%. Day to day medical expenses such as doctor’s visits and prescription fees are often overlooked but can equate to a substantial amount over the course of a year.
  2. Flat Rate Expense Relief – these are a type of tax relief for PAYE workers in specific trades and professions, whereby a person can reduce the amount of taxable income they have each year on the cost of certain expenses. The amount that can be claimed depends on the job because the rates are set by Revenue each year for various classes of employee. A full list of jobs and associated reliefs can be found online at Revenue.ie. Over 180 different occupations are entitled to flat rate expenses of varying amounts between €21 to €2,476 per year with an average of €247 per year. Workers should note however, that flat rate expenses are not automatically deducted from pay so you have to be proactive and claim them yourself.
  3. Stay and Spend 20% tax relief per person up to a value of €125 per individual or €250 per jointly assessed couple. This applies until April 2021 and can include meals in local restaurants.
  4. Increased income tax relief for the Help-to-Buy Scheme – €30,000 (up from €20,000), or 10% (up from 5%) of the purchase price. Buyers can now max out on this grant on homes of €300,000 in value, rather than the previous amount of €400,000.
  5. Cycle to Work Scheme – increased from €1,000 to €1,250 (€1,500 for electric bikes). Taxpayers may now avail of the exemption once in any four-year period (previously a five-year period), so those who bought a new bike in 2016 or before can upgrade again now.
  6. E-Worker relief – if a person works from home, they can apply for some tax relief on the cost of utilities and other expenditures that might be incurred over their working year. An employer can make a voluntary payment to an employee of €3.20 per workday without deducting any PAYE, PRSI or USC. This payment is intended to cover expenses such as heating and electricity costs. There is no obligation on the employer to make this payment and many employers are not in a financial position to provide their employees with this relief.  If you are an e-worker and your employer does not pay you the tax-free amount of €3.20 per day you can claim e-worker tax relief instead. Revenue will allow 10% of your utility expenses as an e-working expense, with the exception of broadband bills, of which 30% is allowable.
  7. Home Carer Tax Credit can be claimed by any housewife/househusband caring for their own children. The value of the credit for 2020 is €1,600. It can be claimed either if the spouse is at home full time, or if the spouse works part time and earns less than €10,400 in 2020 (if they earn between €7,200 and €10,400 will get a portion of the tax credit)
  8. If you are paying for tuition fees for a full or part-time third level course, be it for yourself or for your child, then you may well be entitled to tax relief on the cost.

Lifetime loans differ from more mainstream equity release products in one crucial way; there are no repayments during the “lifetime” of the borrower.

Seniors Money is currently the only lender offering such a product in the Irish market which it is selling through its new retail division, Spry Finance – launched “as a refreshment of the brand”– although Derek Handley, director with Spry Finance, expects that a player from the UK will likely enter the market at some point.


Spry Finance, operated by Seniors Money Mortgages (Ireland) DAC, is making available no-repayment loans to over-60s secured on the borrower’s home.

Instead of monthly repayments, interest is added to the loan balance and the loan is not repayable until after the borrower dies or moves out of the property.

Many of the following tips are practical and easily implementable. Some you will know or have heard before but they will give you the impetus to focus on your own finances to start saving money now when it really matters.


Kevin Johnson of the Credit Union Development Association (Cuda), another representative body, said credit unions won’t be paying a dividend this year, but they continue to support those that need it most issuing hardship loans, sometimes at very special terms, and giving grants to community support groups.


Jarlath’s story is one of several from a host of well-known faces in Ireland and the UK participating in Royal London’s ‘Lost for Words’ digital exhibition, in partnership with renowned photographer Rankin, see lostforwords.royallondon.com. 


Trevor Grant, Chairperson of the Association of Independent Mortgage Advisors explains that getting mortgage approval during a pandemic isn’t hugely different to the pre-pandemic process, provided your circumstances haven’t changed. However, some banks will require further information.

“If your finances have not been directly impacted by Covid-19, then you will need the same documentation as you would have needed this time last year.


According to director of Affinity Advisors Peter Gilbourne, Central Bank rules state that mortgage applicants can only borrow up to three-and-a-half times their salary in combination with having their 10% deposit. There are some exemptions to these rules but they can be difficult to avail of due to a variety of factors – not least that banks are not allowed grant exemptions above a certain volume.


“The crux of the matter for mortgage holders is [that] their bank would prefer if they didn’t switch,” says Trevor Grant, chair of the Association of Irish Mortgage Advisors. “It is up to the Central Bank and other consumer advocates like mortgage brokers to get the message out there,” as new CBI research finds 3 in 5 eligible mortgages could save more than €1,000 in the first year after switching to a cheaper lender.


The BT Blog #9

On Coping with a Future Tax Tsunami

Guest Blog by Marc O’Dwyer, CEO, Big Red Cloud

The Budget announcement to extend the debt warehousing provisions to allow self-employed taxpayers to defer payment for a period of one year, with no interest applying, will have come as a huge relief to business owners. It could mean a cashflow saving to a typical self-employed person of anywhere between €15,000 to €20,000 this year – money that could mean the difference between survival and personal insolvency for a huge cohort of businesses out there.

While we would welcome the move in order to help stabilise cash flow now, this money will have to be paid at some stage in the next year or two to settle the outstanding tax liability. Any businesses that avails of this needs to be mindful that there will be a double payment due eventually, which they will have to service.

With the self-employed tax payment deadline approaching, these workers and businesses will be hugely relieved that they can delay their final 2019 tax payment and their 2020 preliminary tax for a year without interest or penalties. And even if they’re still struggling at that point, they can continue to defer it and pay just 3% interest thereafter, which is far lower than the interest that would ordinarily be charged.

This is seriously useful and should mean the difference between many small businesses, such as taxi drivers and many others working in the hospitality industry, staying afloat or going out of business.

However, we would be concerned that it took years to successfully move the self-employed to the current preliminary tax system where they pay their tax in the same year. The deferment could lead to a tsunami of tax debt that many may struggle to cope with while keeping their current taxes up to date.

Even if these businesses get back to normal turnover volumes sometime next year, it’s unlikely that new business will be sufficiently booming to enable them to pay a double tax liability. The real hope is that there will be little or no tax due for 2020 as it was so poor, which would only leave the balance of 2019 and preliminary for 2021 to pay.

While Revenue have shown great flexibility and will do their best, the Finance Minister’s assumption that all liabilities will ultimately be collected may be optimistic.

Big Red Cloud is a leading supplier of online accounts software to the SME market, servicing over 75,000 businesses.