Effective from 1 January 2024, employers will be obliged to file an additional electronic return with Revenue on or before the payment of three specific categories of non-taxable remuneration.
These categories of non-taxable remuneration will be referred to as “Reportable Benefits” and include;
- The remote working daily allowance,
- Vouchers and trivial benefits covered by the small benefits exemption, and
- Vouched and unvouched travel and subsistence payments.
While the Enhanced Reporting Requirements (ERR) return will be separate to an employer’s standard payroll return, it will follow the same real time reporting principles. All relevant information must be collated prior to the payment or delivery of the reportable benefits.
From an employee’s perspective, details relating to all reporting benefits advanced to will be visible in their ROS MyAccount.
REPORTABLE BENEFITS
Remote working daily allowance
The ERR return must include all tax-free payments of €3.20 per day to employees for each day worked from home. Details such as the number of days worked by employees in the reportable period and the amount paid must be reflected in the ERR return.
Vouchers and trivial benefits covered by the small benefit exemption.
Based on prevailing rules, vouchers or benefits provided to employees come within the “small benefit exemption” scheme. Currently, an employee can receive two small tax-free benefits in the year from their employer.
The aggregate value of these benefits cannot exceed the aggregate value of €1,000. Where the aggregate value of the first two benefits is less than €1,000, an employee is not permitted to receive additional tax-free benefits.
The value and dates of the payment of these vouchers and benefits must be returned in the ERR report. However an employer need to be mindful of all benefits advanced to employees in the future. At present, a level of uncertainty exists as to what exact benefits constitutes reportable benefits under the small benefit scheme. For example, if an employer commences advancing token gifts such as Easter eggs or flowers, these gifts may inadvertently be regarded as a reportable benefit. Where multiple token gifts are advanced throughout the year it may inadvertently impact an employee’s ability to receive a tax-free voucher later in the year.
Travel and subsistence payments
The amount and dates of payments for each of the following sub-categories must also be reflected in the ERR return.
- Travel (Vouched & Unvouched),
- Subsistence (Vouched & Unvouched),
- Site Based Employee Allowances (including Country Money),
- Emergency Travel Allowance, and
- “Eating-on-Site” Allowance.
The information disclosed on the ERR return will not include mileage incurred, nor will it include details relating to an employee’s car. However, in line with current practice, detailed travel records must be maintained to support all payments made. These records may be requested as part of a subsequent Revenue Intervention.
Measures to improve efficiency.
- Credit Cards and Fuel Cards. Based on published guidance notes, there is no requirement to report details of an employee’s use of company fuel cards or credit cards. Therefore, where significant travel and subsistence costs are being reimbursed to employees on a regular basis, management may consider providing certain employees with fuel cards or credit cards.
- Timing of Payments. Reportable payments must be included in an ERR report when the payment is advanced by an employer to an employee, not when the employee incurs the cost initially. Therefore businesses may decide to reimburse all employees on a set day each month or quarter. By implementing this policy, as opposed to reimbursing each employee immediately, the number of ERR filings required by the employer should be reduced.
How should an employer prepare for ERR?
- A comprehensive review of the controls in place to track all vouchers and non-cash payments advanced to employees must be undertaken. From the outset, there should be a clear process in place to ensure all reportable benefits are correctly identified and reported to the correct personnel within the organisation on a real time basis.
- An employer needs to identify who is responsible for submitting the ERR report on ROS. The designated person needs to ensure that they are aware of all legislative restrictions applicable to the reportable benefits. Where the process is outsourced to a third party, there must be a clear line of communication between the organisation and the third party. The information provided must be correct and provided on a real time basis.