WFH | Deutsche Bank says home workers should 'pay a tax for the privilege'

Deutsche Bank says home workers should 'pay a tax for the privilege'

New research from economists at Deutsche Bank has advised that people who choose to work remotely should ‘pay a tax for the privilege’ – the Telegraph reported.

According to the publication, research from a team at the investment banking firm has suggested a tax of five per cent of an employee’s salary if they choose to work from home.

This proposal is said to be for those who regularly opt to work from home, outside the Government-imposed lockdown measures. England is currently in a month-long lockdown which is set to last until December 2, 2020.

Work from home will be the ‘new normal’

Even after the coronavirus crisis has passed, the report claimed that homeworking will become part of the ‘new normal’ going forwards.

“We argue that remote workers should pay a tax for the privilege,” part of the report read.

With the research suggesting that this measure could raise £36billion ($48billion) a year in the US and billions of Euros in Germany, the team of strategists said that the money raised could help “fund material income subsidies for low-income earners who are unable to work remotely".

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Alternatively, the report stated that the money could go towards upskilling or retraining employees working at businesses that may not experience the same demand after the pandemic passes.

Elsewhere, the BBC reported that in the UK, Deutsche Bank calculated that the tax would generate circa £6.9billion per year.

Growing appetite for homeworking after the pandemic

Elsewhere, the research found that once the pandemic has passed, more than half of those who have worked remotely at some point want to continue doing so permanently for at least half of the working week.

This increased appetite to work from home dovetails with separate research from Locatee which found that if employees were given the choice, just seven per cent would want to return to the office full-time.

In addition, London Loves Business reported that one in five (18%) would opt to work from home every day, whilst 32% would want to work from home most days.

Thomas Kessler, CEO and Co-Founder of Locatee, said: “The research shows us there’s a clear appetite for UK office workers to retain the option of remote working after restrictions lift.”

Aside from there being an appetite among workers, several large employers have said that they will allow their staff to work from home when the pandemic is over – whether this is on a full-time or part-time basis.

Twitter and Mastercard are just two examples of organisations that will allow staff to work from home going forwards.

Potential savings while working from home

When working from home, Deutsche Bank’s research said that staff would save money on travel, lunch and socialising, with economists stating that they would be contributing less to the infrastructure of the economy.

The economists added in the report: “That is a big problem for the economy as it has taken decades and centuries to build up the wider business and economic infrastructure that supports face-to-face working.”

Separate research from Tyto has pointed towards some of the savings employees can enjoy from remote working.

For example, it found that being able to work from home saves London commuters an average of £5,411 in travel costs.

How would it work?

The concept is that if the employer doesn’t provide a worker with a permanent desk, the tax will be paid by the employer.

However, if it does, and the staff member chooses to work from home, the report said that the employee would be taxed for each day that they do so.

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Comments (6)

  • The Elvin Marbles
    The Elvin Marbles
    Mon, 16 Nov 2020 1:15pm GMT
    People working from home have to pay for the utilities to run a home office - electricity, water, internet services etc., so what they save in travel they will spend in running costs. At the same time, their firm will save on the running costs of expensive offices, so the suggestion that employees should pay for the privilege of saving their employer money is insulting. I would predict that employees would punish any such short-sighted, greedy employer in subtle ways. A big shot in the foot for employee engagement.
  • VeniVidiVici
    Thu, 12 Nov 2020 4:38pm GMT
    I totally agree that Deutsche Bank home workers should pay additional tax. Let's make it 50% for anyone homeworking for them.
    As for the rest of us we all know what DB can do with its ideas.
  • Mike Butler
    Mike Butler
    Thu, 12 Nov 2020 2:28pm GMT
    So which numpty came up with this idea? Someone actually thinks home workers should be taxed? Remarkable!
  • Jamie Charles
    Jamie Charles
    Thu, 12 Nov 2020 1:53pm GMT
    The Idea of deducting even more TAX from employees for choosing to work remotely is preposterous. This is an agreement between employee and employer and has nothing to TAX. TAX is still paid on income whether you're working in an office or remotely. Contractually, the salary offered is for work carried out and is not based on how much money is spent on commuting. If you reverse the scenario, does this mean that employees would be entitled to additional salaries for having to deal with commuting, putting up with other employees in the workplace or even bonus for helping the economy earn more money through spending their hard-earned money on commuting to work?
    According to the Harvard Business Review (Berkinshaw, Cohen and Stach, 2020), employees achieve "50% more activities through personal choice" because they see them as important, the number of tasks that employees see as tiresome drops to 12% from 27% and the workload ready to offloaded to others drops to 27% from 41%, not to mention the 12% reduction in time spent in meetings and 9% more time "interacting with clients and external partners."
    Overall, we can start to see a benefit to remote working, in a huge saving of manpower, as well the multiple pieces of research on remote workers spending their, once commuting time, to additional working hours. Does this mean that salaries are to be increased to cover the additional and more productive hours compared to working in an office?
    As much as the economy is important, companies who charge additional TAX, run the risk of upsetting their employees. If employees are unhappy they resort to seeking new employment, which affects the company and in return affects the footprint that the company has in the economy.
    Saving money from one's salary for remote working shouldn't be punished by inforcing a TAX. Employees still spend money on lunch, whether at home or going out for lunch (post-COVID), socialising is still maintained, however, instead of during work hours in the office, employees go out for lunch, dinner and even drinks, this is also feeding their money back into the economy. Meals out are simply moving from locations near the office to locations closer to home. The only real industry that loses out is the travel industry, however, they would only lose out on season tickets as employees would still need to travel in for meetings, at the higher cost of a day return, as well as all the additional travel that would normally be used under a season ticket, is now purchased at the full price of a return or single.
  • Cinzia
    Thu, 12 Nov 2020 1:10pm GMT
    I read this report this morning and got really angry about it.

    They were talking about 5% tax based on a 30k annual salary. Paying around £125 per month on this very backward thinking tax. Now imagine if you are on a 70k salary ( a dream I know), that means that an individual on that wage will have to pay £292 per month. Is this really fair?

    Personally, when I worked in the office, I never bought anything. The only extra expense that I had was £52 a month for transport; food was bought at the weekly shop and no other shopping was done during the week (during or after working hours).

    I know that at least 70% of the employees who I work with bring food from home. We can't afford to buy £5 meal deals every day plus paying for the monthly transport!

    Why should I have to pay double of what I used to pay for doing the exact same job but in the comfort of my own home? Working from home is not a privilege, is just an advancement in working/life balance. Not something to be punished for.

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