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What Home Expenses Can You Claim as a Business Owner in Ireland

how to claim home office expenses

Ireland is leading the charge in terms of how rapidly remote working is replacing traditional on-site work, with a quarter of Irish workers operating from home. If you’re a business owner or employee who performs most of their duties at home, you can claim back a substantial amount of home office expenses –  the expenses incurred from the operation of business or performance of employment duties within your primary residence. These can be telephone, electricity bills, furniture, and even rent. What’s the point? To reduce the amount of tax you pay at the end of the year.
In this guide, we’ll go through the types of home office expenses you can claim back as a business owner or director and how much you can claim back. 

Source: Unsplash

Eligibility Criteria for Claiming Home Office Expenses

There are several conditions that you must meet to be eligible for claiming home office expenses in Ireland.

  1. Be employed: You must be employed full-time or part-time and regularly work from home.
  2. Have a dedicated workspace: You must have a dedicated workspace in your home that is solely used for work purposes.
  3. Incur expenses: You must keep accurate of incurred expenses related to your home office, such as electricity, heating, and broadband and be ready to submit them to the Revenue Officers.

What Expenses Can I Claim When Working from Home?

In simple words, under the eligible home office expenses fall only those expenses made for existence of business. To determine whether the expenses you make can be claimed as office, answer one question “Would I need to spend on it if my business didn’t exist?”.  There are several catetogies of expenses that you, however can deduct as home office.

Phone: If your personal or home mobile phone is used for business calls, you can claim a part of its usage as a business expense. If you purchase a phone that you use to make business calls during the day and personal calls during the evening, the whole cost can be claimed as business expense as long as you don’t spend extra on your personal calls.
Heating,  Electricity, and Internet: Probably the hardest to calculate and claim is the share of the heating, electricity, and internet expenses you used to perform your duties. According to the Revenue, you can claim 30% of your heating, electricity, broadband, and internet expenses when working from home. Apportioned made on the base of the number of days worked from home in a year.  Here’s a quick example.

Jack has worked 180 days from home during the year 2022, 90 of which he worked from home. The annual amount of electricity and heating incurred is Eur 1,750. 1750×90 /365=432. The Revenue allows to claim only 30% of the cost of electricity and heat attributable to work. 432×30%=129,6

Furniture and Equipment: When you’re a director operating from home, buying essential items for your business responsibilities, like a laptop, printer, chairs, tables, or stationery, qualifies as an eligible business expense. You can also use these items outside working hours as long as they are initially recognised as legitimate business expenses.
Part of Your Mortgage and Rent: In general, the cost of rent or mortgage of the home you work from is not considered a home office expense – paying them is essential for personal use. After all, you would still incur such expenses if your business didn’t exist. There’s an exception, though, if you need to increase the size of your home to dedicate some space to your home office. The increase in rate can be justified as a business expense, provided you’re not moving to a more expensive part of the city. This one needs to be illustrated with an example as well.

Eve spent 850 Eur on the rent of a 2-bed. She had to move to a 3-bed to dedicate one room to her home office. Now she pays 1100 Eur for the rent of a 3-bed in the same part of the city. Eve can claim back the increase in rate of 250 Eur as a home office expense (1100-850 = 250). Eve could not claim the increase in rate if she moved to a more expensive district.

Source: Unsplash

How to Claim Home Office Expenses

  1. Gather receipts and bills: Collect all receipts and bills for the eligible expenses you incurred throughout the year.
  2. Calculate the amount: Calculate the total amount you can claim for each expense category (electricity, heating, broadband, and other expenses).
  3. Submit an Income Tax Return: Complete an Income Tax Return for the relevant tax year.
  4. Enter expenses in myAccount in ROS (Revenue Online Service): Enter the amount of each expense into the Receipts Tracker in your myAccount. Y
  5. Submit tax return: Submit your completed Income Tax Return.

The Bottom Line

While Ireland is taking the lead in the adaptability of home working, some company directors are still unaware that a substantial part of their expenses can be claimed to reduce the tax burden. In this guide, we provided the types of home office expenses eligible for claiming and how to claim them in the correct way. 

If you’re seeking help with calculating and claiming your office expenses, contact our accounting experts. Note that this article is for acquittance purpose only and cannot be used as professional tax advice.

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