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12th Nov 2020

Economists say staff who work from home after pandemic should pay more tax

Deutsche Bank economists think staff who work from home during the pandemic should pay an extra 5% tax for the privilege of not commuting

Reuben Pinder

They claim it would leave employees no worse off

Economists at Deutsche Bank have proposed imposing a 5% tax on staff who continue to work from home after the coronavirus pandemic.

The report claims they would be no worse off due to the savings made by not commuting and not making on-the-go purchases like lunch, as well as clothing for the office environment.

Or, the report suggests making employers who do not supply their staff with a permanent office desk to pay the extra tax, which calculations estimate would raise £7 billion in the United Kingdom.

It is thought this extra tax revenue would go towards helping lower paid workers who do not have the option of working from home.

“Working from home will be part of the ‘new normal’ well after the pandemic has passed,” said Jim Reid, global head of fundamental credit strategy and thematic research at Deutsche Bank.

“Our calculations suggest the amounts raised could fund material income subsidies for low-income earners who are unable to work remotely and thus assume more ‘old economy’ and health risks,” Reid said.

The ease with which many companies and their employees adapted to working from home during this pandemic, realising how unimportant the office environment and how pointless the daily commute was, has led to a surge in popularity of working from home.

Some companies are planning a more flexible working pattern for when life begins to return to ‘normal’, only making staff come in to an office once or twice a week.

“For years we have needed a tax on remote workers – Covid has just made it obvious,” Deutsche Bank strategist Luke Templeman 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.”