Department of Finance chooses cheapest of three measures to help remote workers offset costs of working from home

Finance Minister Paschal Donohoe chose the cheapest and most onerous of three options for how taxpayers would be allowed to claim tax relief for working from home in this year’s budget.

A department submission reveals how two more generous and much simpler options to reward home-workers were ruled out in pre-budget discussions.

Instead, Minister Donohoe opted for the least expensive option of the three and one that involved “most effort” for workers who were planning to make a claim.

Officials had also put forward the possibility of a €1.50 per day deduction that could be claimed by employees with a cap of two days a week – worth the equivalent of up to €150 each year.

The estimated overall cost of this was put at around €20 million and it had the added bonus of reducing the “administrative burden” in making a claim.

Another option to provide a simple tax credit that could easily be claimed by workers was also floated, which had an estimated cost of €25 million.

The records also include a submission on the VAT compensation scheme for charities.