Employer Reporting of Benefits: Enhanced Reporting Requirements

by Jillian O’Sullivan, Partner, Corporate Compliance at Grant Thornton

Finance Act 2022 introduced the requirement for employers to notify Revenue of certain payments made to employees known as ‘reportable benefits’. The introduction of this reporting requirement is subject to a commencement order; however, the target implementation date is 1 January 2024.

Which Benefits are Required to Be Reported?

Currently only the following tax-free payments or benefits made to employees are deemed ‘reportable benefits’ for the purpose of ERR:

• Small Benefits – Vouchers or benefits provided to employees which come within the ‘small benefit exemption’ regime i.e. currently, up to two small benefits each year which do not exceed a combined value of €1,000
• Remote Working Daily Allowance – Where the employer makes a tax-free payment of €3.20 per day to employees for each day worked from home subject to certain conditions being satisfied
• Travel and Subsistence – Payments by employers to employees to reimburse business related travel and subsistence costs including:

o   Vouched travel & subsistence

o   Unvouched travel & subsistence e.g. civil service mileage rates

o   Country money

o   Emergency travel

o   Eating on site allowance

Revenue will require employers to report an employee’s details, the amount paid and, in the case of the Remote Working Daily Allowance, the number of days.

There is no requirement to report details of an employee’s use of company fuel cards or credit cards. Only expenses detailed above will require reporting.

How Will the Information Be Reported to Revenue?

Employers will be required to report details of the non-taxable benefits outlined above in real time, which makes this reporting requirement due on or before payment to employees.

A Revenue Online Service (ROS) facility will be provided to enable employers to submit, amend and correct enhanced reporting requirement data. From 2024, employees will be able to view information submitted by employers through their myAccount.

Reporting will be separate from payroll submissions to ensure the integrity of payroll records. Revenue envisage this separation as a means of avoiding the accidental creation of new or dummy employments purely to report benefits.

How Can an Employer Prepare for Enhanced Reporting Requirements (ERR)?

Revenue have confirmed that this initial reporting requirement is only Phase I and that further employee payments and/or benefits are likely to come within the scope of EER in the coming years.

To prepare for the target go-live January 2024 date, employers should:

• Review how they are currently collating the reportable benefit information as systems may need to be introduced where information is currently stored in a manual format;
• Consider whether a cross departmental approach to collating the data is required as information may be stored in HR systems yet Finance may be the department responsible for reporting the details to Revenue;
• Determine how the current internal IT systems will integrate with Revenue’s on-line reporting facility;
• Assess whether data quality may be an issue and educate approvers of claims forms on acceptable approval processes;
• Decide whether to implement a process of tracking and allocating the data that’s compatible with the information that Revenue requires to be identified by each category.; and
• Consider current payment timeframes may require consideration, e.g. where an employer has an on-demand expense payment policy,  to determine whether these need to be changed to a more structured process to reduce potential administration.

In advance of January 2024, employers should review their policy on the reimbursement of reportable benefits to ensure current practices are aligned to legislation and Revenue guidance.  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.

About the author

Jillian O’Sullivan leads the company secretarial and employer solutions team at Grant Thornton, which includes the provision of outsourced payroll services. She assists companies establishing a presence in Ireland, from their initial setup to their on-going compliance, payroll and other outsourced service requirements. She also deals with all areas of corporate compliance and governance. Jillian has significant experience in the restructuring of corporate entities and groups, both medium and large, and in the implementation of related tax planning and succession schemes. She lectures extensively and facilitates seminars on both the role and responsibilities of directors in companies.