Tax relief programs for remote workers
The coronavirus pandemic has pushed a large percentage of the global workforce to remote work, and as governments try to continue this trend to prevent a new wave of the Omicron variant, Careersaas analyses how governments are incentivizing those staff who choose work from home.
An issue that faces all remote workers is rising energy prices; with most knowledge workers and engineering staff requiring a large part of the day powering their homes for heat, laptop or computer electricity and other energy expenses. A survey conducted by Electric Radiators Direct indicates that almost half of the UK workforce have found that the energy price hikes have impacted or will change their preferred choice of working location. The survey found that most workers will spend around $100 a month working from home, in comparison to the average travel expense of around $70 in the United Kingdom.
Tax relief for WFH in the United Kingdom
British work from home employees can claim £6 per week tax relief from the government on job expenses, this includes gas and electricity costs. A survey indicated that rising prices for energy will mean that as much as 23% of the UK workforce will not use energy to heat their home this winter, in order to save costs. With this meagre offering from the UK government, staff will need to take the difficult decision of whether or not to return to the office, or continue to work from home.
Tax relief in Ireland
The Irish will be able to claim back 10 percent of their electricity if working from home; this will be increased to a massive 30% in 2022. It is also possible to claim back 30% on broadband costs in tax. However, there have been complaints from the Irish public that claiming these expenses back is cumbersome and others commented that, “it’s not even worth applying for”.
Deductions and in some cases exemptions are available for those in Belgium and France already. These are considered only to be only temporary measures for the pandemic, and thus tricky for a remote worker to stay on top of changing regulations.
In South Africa, any WFH worker who plans to remote work or set aside a place in their home used for the purpose of “trade”, are allowed to deduct expenses incurred in maintaining a place of work inside of their homes. This is calculated on a pro-rata basis as defined in the Income Tax Act in South Africa. South Africa of course have been the first country to have been impacted by the ongoing Omicron dominant coronavirus variant.
There is still currently no federal law that a remote state can receive tax deductions or relief. At the end of the day, it is up to each state to decide, and for the most part these states do not provide reimbursement of any WFH expenses.
Whilst all of these legislations appear to be changing, other governments, particularly those in Europe, are considering wide scale changes to laws for those who intend to work cross-border during the global pandemic. The common thread is that companies and staff must stay on top of ever-changing legislation. Add this to the ongoing challenge for companies designing a remote work policy for staff. From a tax perspective, companies should register with the relevant tax and social security authorities on behalf of their employees.