Deutsche Bank proposes 5% daily tax on remote work

Employees who choose to continue working from home beyond the pandemic should be taxed accordingly to help rebalance the economy, a new report has argued.

The 'Konzept' report, released by Deutsche Bank this week, has proposed a 5% tax for each day an employee opts to work at home, which, based on an average UK salary of £35,000, would equate to an extra £6.73 per day.

It argues that this is money remote workers would have spent on commuting, eating on the go, and work clothing, but have the luxury of being able to avoid these costs due to the nature of their role.

The report also suggests an alternative tax that could be paid by employers who do not provide their workforce with a permanent desk.

A 'working from home tax' has been needed "for years", according to Luke Templeman, head of thematic research at Deutsche Bank. The COVID-19 pandemic has made it more obvious, he said, with the sudden shift away from physical offices allowing a large section of the workforce to still lead a full economic life, but contribute less to the UK's economic infrastructure.

"Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society," he said. "Those who can WFH receive direct and indirect financial benefits and they should be taxed in order to smooth the transition process for those who have been suddenly displaced."

In the UK, the proposed tax would be expected to raise around £6.9 billion in economic stimulus, which could be used to generate grants of up to £2,000 for the 12% of workers over the age of 25 that currently work for minimum wage, and are either out of work or are unable to work remotely.

It's important to note that Deutsche is not calling for a tax on all remote workers, it simply suggests imposing it on those workers choosing to stay home once the pandemic has subsided.

During the pandemic, the UK saw a seven-fold increase in remote working, around 47%, and many of these people will continue to do so, according to recent surveys.

The bank's own research suggests that more than half of those workers who took up remote work at the start of the pandemic would be willing to shift to this permanently at least two or three days a week.