Wednesday, May 05, 2021

People working from home 'should pay more tax' after pandemic

People working from home 'should pay more tax' after pandemic

Staff who continue to work from home after the pandemic should be taxed to help support workers in lower-paid jobs, a new report has suggested.

Research from Deutsche Bank said workers should be taxed 5% of their salary each day if they choose to work remotely after coronavirus restrictions lift.

The bank argues the tax would leave the average employee no worse off, since they would be saving money on commuting, buying lunch out or purchasing more work clothes.

For employers who do not provide their workforce with a permanent desk, the bank suggests they should pay a work-from-home tax while those who are self-employed or on low-incomes should be exempt.

According to the report, this tax could create $48 billion (£36 billion) a year in the US and €20 billion (£17.8 billion) in Germany.

In the UK, Deutsche Bank calculates the tax could generate £7bn a year, enabling the Government to pay out £2,000 grants annually to low-income employees who have to travel to work as well as those under threat of redundancy.

It comes as the UK government’s website states Brits can claim tax relief on some of bills if they are required to work from home.

Deutsche Bank strategist Luke Templeman wrote: ‘For years we have needed a tax on remote workers. Covid has just made it obvious.

Deutsche Bank suggests staff who work from home should be taxed

‘Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society.

‘Those who can work from home receive direct and indirect financial benefits and they should be taxed to smooth the transition process for those who have been suddenly displaced.’

He also said: ‘A big chunk of people have disconnected themselves from the face-to-face world yet are still leading a full economic life.

‘That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits. That is a big problem for the economy.’

Deutsche Bank suggests staff who work from home should be taxed

A 5% work-from-home tax works out at around £7, based on a salary of £35,000.

It comes as millions of people in the UK have transitioned into remote working as employers closed offices to contain the spread of coronavirus.

Meanwhile, many employers have said staff will now be allowed to work from home permanently – either full-time or part-time.

The Deutsche Bank research also shows one-third of people want to continue working at least two days a week from home once the pandemic is over.

But the bank said there are millions of workers, like factory staff and nurses, who cannot work remotely.

Mr Templeman wrote: ‘The virus has benefitted those who can do their jobs virtually, such as bank analysts, and threatened the livelihoods or health of those who can’t.’


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