09 Apr, 2024

Are you at risk of an unnecessary audit?

Employers who pay their employees certain expenses and/or provide certain non-taxable benefits must report this to Revenue on a real-time basis as per the new Enhanced Reporting Requirements (ERR) that came into effect on 1 January 2024.

How will ERR affect me?

You now must submit an ERR for expenses and benefits that fall within the scope of the new requirements in addition to your Payroll Submission Request (PSR) in each payroll run. The report must be submitted to Revenue via ROS in real-time, which means reporting to Revenue on or before the date on which you pay the benefit to your employees or directors. Effective and timely communication with your payroll specialist is crucial as this will involve some additional management. Keep in mind that your payroll specialist can only assist you in reporting the required information if they are aware that you are making payments that fall within the scope of the new rules.

Note that ERR reporting will be separate from payroll submissions to ensure the integrity of payroll records. Employees will be able to view the ERR information submitted by their employer through their myAccount.

What payments are included in ERR?

At present, three non-taxable benefits are subject to ERR: travel and subsistence payments, the remote working daily allowance, and benefits falling under the Small Benefit Exemption scheme.

Examples of travel and subsistence payments that fall under the new rules include the reimbursement of any of the following expenses:

  • Travel (vouched) – reimbursement of fuel expenses

  • Travel (unvouched) – paid mileage for business journeys

  • Subsistence (vouched) – reimbursement of meal/lunch expenses

  • Subsistence (unvouched) – paid daily subsistence rates

  • Site based employee allowance (including “Country Money”)

  • Emergency travel allowance

  • Eating on-site allowance

ERR also applies to the €3.20 daily remote working allowance and to benefits provided under the Small Benefit Exemption Scheme.

If your employees receive benefits in any of the categories mentioned above, you must report this to Revenue via ROS in real-time.

What benefits are not reported under ERR?

Certain benefits, such as the use of company credit cards or prepaid cards, are not currently within the scope of ERR. Likewise, payments for fuel cards, toll tags, car insurance, and motor tax fall outside ERR as these payments are paid to third parties rather than to your employees or directors.

What do I need to do now?

If you haven’t already done so, now is the time to review your policy on the reimbursement of reportable benefits and make sure that your current practices comply with the new requirements. This is important as ERR will provide Revenue with increased visibility of tax-free amounts being paid to employees along with data capable of being analysed for compliance interventions.

The consequences of non-compliance:

ERR should be a priority for all businesses, as non-compliance can lead to significant penalties. These penalties range from financial fines to other statutory sanctions. Non-compliance could also prompt an audit of your business. With these penalties having the potential to be time-consuming and resource-intensive, our team strongly advise all employers to reach out for help if they are struggling to implement ERR.

How can ifac help?

At Ifac, we have extensive experience in employment tax matters and can help you comply with your ERR obligations. For further information and/or assistance, please contact us on 1800 714 050 in the first instance.