What are the tax implications of homeworking?
As an employer, it is your responsibility to provide your employees with a good home workstation. There are several ways you can care of this yourself, or you can outsource it. If you decide to do it yourself, it is wise to consider the tax implications beforehand.
Three options
Employers can make arrangements for homeworking in several ways. Essentially: (1) you let your employees choose and buy their own home workstation; (2) you give every employee a (new or used) home workstation on loan; (3) you allow every employee to buy a home workstation on credit. The three options have different tax implications. In this case, the guidance is the Work-Related Costs Scheme (WKR).
The Work-Related Costs Scheme (WKR)
The WKR sets out the cases in which you, the employer, can offer your employees a tax-free gift. And, of course, those in which the tax authorities view the gift as ‘remuneration in kind’ and deduct tax. The WKR uses the idea of a ‘free space’. Everything inside the space is untaxed (a Christmas gift of up to €50, for example). The WKR has been amended to cover home workstations and now includes a ‘specific exemption’.
The experience of Rob Keulemans, Director Business Development and homeworking expert:
“The selection, purchase, delivery (and collection) of Arbo-standard homeworking furniture is a job in itself. Now that this period of improvisation has passed and we recognise that homeworking is a permanent aspect of the new working environment, more and more companies are calling on professional support to navigate their way through this process.”
The specific exemption
Under the specific exemption you, the employer, may provide employees with office furniture and cover the cost without this being seen as ‘remuneration in kind’ by the tax authorities, provided that certain strict conditions are satisfied. The main condition for the ‘specific exemption’ is that the furniture must be Arbo-standard office furniture. This condition can be satisfied by providing Arbo-standard office furniture for your employees on loan, or by ensuring that your employees is unable to purchase non-Arbo standard office furniture.
Keep your finger on the pulse
Please note that the specific exemption conditions will not be satisfied if you allow your employees the freedom to choose their own home furniture. This is because you won’t know what kind of home workstation your individual employees have purchased (or worse still, you won't know if they have purchased one at all). In this case, the tax authorities will consider your reimbursement of the purchase price as remuneration in kind and deduct tax.
