Should there be a tax on working from home?

Working from home has allowed millions of people to continue working during the Covid-19 pandemic. But not every job can be done remotely, and a new report argues that home-working should be taxed in order to help support people whose jobs are under threat.

Deutsche Bank strategist Luke Templeman proposed a tax of 5% of a worker’s salary, which would be paid by the employer. In cases where an employee is provided with a desk but chooses to work from home instead, the worker would pay the tax out of their salary for each day they work from home.

The report argues that those who can work from home receive direct and indirect benefits, including savings on travel, lunch and clothes, as well as greater job security, convenience and flexibility.

For the UK, the tax equates to just under £7 per day, based on a salary of £35,000.

The self-employed and those on low incomes would be excluded and the tax would only apply outside the times when the government advises people to work from home.

Research by Deutsche Bank has shown that, after the pandemic has passed, more than half of people who worked from home for the first time want to continue doing so for between two and three days a week.

“The sudden shift to working from home means that, for the first time in history, a big chunk of people have disconnected themselves from the face-to-face world yet are still leading a full economic life,” Templeman said.

“That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits.”

Income generated by the tax would be paid to people who can’t do their jobs from home, for example to support them while they retrain or to recognise essential workers on low wages who assume a greater Covid risk.