Update: Enhanced Reporting Requirements
Employers are required to report details of certain payments made to employees and directors. This is due to the Finance Act 2022 introduced Section 897C Taxes Consolidation Act, 1997, which has come into force on the 1 January 2024. Should an employer make one or more of these payments to their employees or directors, they must submit the required details on or before the payment date to the individual. Employers are already required to collect and retain records in relation to these payments/benefits.
It is appreciated that any change to practices can be challenging and this is why a bedding-in period has been afforded to allow employers time to adapt: Revenue are operating Service for Compliance until 31 December 2024, and are offering support and assistance to employers in meeting their obligations. Employers are advised to raise any issues/difficulties in meeting their obligations with Revenue. By end-May 2024 over 35,000 employers have reported benefits to the value of over €600,000,000 so it is clear that employers are making best efforts to comply and have made changes to their systems and processes to facilitate compliance.
What is Reportable?
The categories required to be reported are:
- Travel & Subsistence
- Small benefit exemption and
- Remote Working Daily Allowance
The information being asked of employers has also been kept to a minimum.
- For Small Benefit Exemption we are simply asking for the date the benefit was provided and the value.
- For Travel and Subsistence, there are 8 specific categories, and we require the date and amount paid to be provided. These categories are:-
- travel vouched,
- travel unvouched,
- subsistence vouched,
- subsistence unvouched,
- advance payment of travel and subsistence,
- site-based employees (including “country money”),
- emergency travel, and
- eating on site.
- For Remote Working Daily Allowance, we are asking for the date and amount of the allowance paid and the number of days the payment relates to.
What has not changed?
An employer must determine in advance of making any payment or providing a benefit whether it is taxable or non-taxable. There are no changes to the legislation or criteria that already exists regarding any of these items being a non-taxable payment/benefit.
There is certain conditionality which must be satisfied in order for an employer to make any tax-free payment or benefit.
As such, the employer is currently required to have sufficient controls in place as well as comprehensive supporting documentation and records to substantiate the preferential tax treatment. The decisions as to whether the payment is taxable pay or a non-taxable benefit/payment should always be known in advance of the payment being received by the employee from the employer. Equally, the information as to what the payment constitutes and its associated value should always be recorded by the employer before the payment is made to the employee. The detailed information including the subcategories under Travel & Subsistence has always been required of employers to support the taxable status of the relevant payment.
Therefore, employers are already required to collect and retain records in relation to these payments/benefits, which should be readily available to supply to Revenue on request.
What is changing?
The legislation requires that all benefits/payments falling within the three categories of Travel and Subsistence, Small Benefit Exemption and Remote Working Daily Allowance are reported to Revenue on or before the payment is made to the employee.
Detailed guidance as to what constitutes a reportable item under each of these categories can be found through Revenues Tax and Duty Manuals;
Items that are not within the remit of these categories are not within the scope of ERR.
For questions on the Enhanced Reporting Requirements, please contact SFA Public Affairs Lead, Jonathan McDade - jonathan.mcdade@sfa.ie.
