Employers - are you ready for Enhanced Reporting Requirements

As we approach the new year, we would like to remind employers that they need to be prepared for the new Enhanced Reporting Requirements (ERR) which are due to come into effect in Ireland from 1 January 2024.

These new rules will require employers to report certain benefits/expenses to employees/directors on a real-time basis.  

In summary, the following tax-free payments/benefits to employees and directors are deemed ‘reportable benefits’:

• Small Benefits - vouchers or benefits that 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 for each day worked from home subject to certain conditions being satisfied

• Travel and Subsistence – payments by employers to reimburse business related travel and subsistence costs (there are seven specific sub-categories)

Revenue will require employers to report employee/director details (including employee reference and employee ID), date of payment, tax year, the amount paid, and other such information - for a comprehensive list of information to be reported, please see Revenues Enhanced Reporting Submission Request: Data Items

https://revenue-ie.github.io/paye-employers-documentation/PIT4/data-items/ERR%20-%20Enhanced%20Reporting%20Submission%20Request%20Data%20Items.pdf

The provision was introduced in the Finance Act 2022, and is subject to a commencement order, but will be applicable from 1 January 2024.

In terms of the reporting itself, employers will be required to report the above details in real time, which makes this reporting requirement due on or before payment to employees/directors. We understand a ROS facility will be provided to enable employers to submit, amend and correct ERR data and reporting will be separate from payroll submissions. 

Finally, we are saying to clients that they need to prepare for these new reporting requirements and employers should:

• Review how they are currently collating the reportable benefit information, how they are categorised and how records are maintained

• Review policies and procedures to ensure they align with the legislation and the new rules

• Review the controls in place to track all benefits

• Review the frequency of payments and consider whether the current approach/timing of payments needs to be amended 

• Identify who will be responsible for reporting and what departments in your organisation need to be involved to ensure timely and accurate reporting

• Determine how the current internal IT systems will integrate with Revenue’s on-line reporting facility 

If you would like to discuss these reporting requirements in further detail or require any assistance in preparing for these changes, please do not hesitate to contact us.