Tax people who work from home at 5% to support risky jobs, says investment bank

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People who work from home should pay a 5 percent tax for the privilege, an investment bank recommended.

Researchers at Deutsche Bank said the tax would increase £ 6.9 billion in the UK and £ 36 billion in the US, which could be paid to people who cannot work from home. Under the plan, grants of up to £ 2,000 would be given to low-income workers and those threatened with layoffs.

Researchers claim that people working from home have enjoyed benefits that many workers have not. Not only are they at less risk during the pandemic, but they also save money by spending less, which reduces economic activity and the tax it generates.

These changes in habits pose problems for businesses, leading to job losses that mainly affect people unable to work from home.

It will likely become a bigger problem if the pandemic changes how people work in the long run. A tax on working from home could entice people to go to the office and the revenue generated would help pay for problems caused as society adapts, analysts have argued.

“Those who can benefit from the WFH receive direct and indirect financial benefits and should be taxed in order to ease the transition process for those who have been suddenly displaced,” wrote Luke Templeman, Deutsche Bank strategist.

“For years we have needed a tax on remote workers. Covid just made it obvious.

“Quite simply, our economic system is not designed to deal with people who can disconnect from society face to face.”

The report highlighted the savings on travel, lunch, clothing and cleaning that homeworkers enjoy.

A 5 percent tax on a salary of £ 35,000 a year equates to around £ 7 a day, which Deutsche Bank has suggested would be paid by the employer.

This money would only be used to support people who cannot work from home and earn less than $ 30,000 (£ 22,700) per year.

More than three-quarters of a million jobs in the UK have disappeared since the start of the pandemic, with layoffs reaching a record high between July and September. Businesses that depend on commuter commerce have been among the hardest hit.

Transport companies have received government support while chains, including Pret a Manger, have cut thousands of workers.

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