A new measure is introduced in Finance Bill 2021 which provides an income tax deduction equal to 30% of the vouched costs of “relevant expenses” for days which employees have worked from their home during the tax year.
Relevant expenses include electricity, heating and broadband and will be adjusted for any amounts which have been reimbursed directly by an employer.
Where multiple individuals (other than spouse/civil partner) reside together and are entitled to relief, the qualifying expenses must be apportioned between each remote worker by reference to the amount incurred by each of those workers.
The legislation will apply for years of assessment from 2022 onwards and formalises the deduction which is currently operated by Revenue on an administrative basis.
This “remote working relief” is in keeping with Government policy of facilitating and supporting remote working and the increased move towards a hybrid working model.
The Benefit-in-Kind (BIK) exemption for employer provided electric vehicles is extended until 31 December 2025, subject to some tapering.
The existing BIK exemption for vehicles with an original market value (OMV) of €50,000 or less will continue to apply until 31 December 2022.
For 2023, the BIK exemption will apply where the OMV of the vehicle does not exceed €35,000; €20,000 in 2024; and €10,000 in 2025.
As is currently the case, a BIK will arise for employees where the OMV of the electric vehicle provided exceeds the threshold applicable when the vehicle was provided.
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