Enhanced Reporting Requirements: Benefits for Irish employers to report on

There are important new reporting obligations for employers to be aware of, which will came into effect from 1 January 2024.

Revenue’s new Enhanced Reporting Requirements require significant administration and, as an employer, you need to be prepared.

To help you, in this article we explain what’s involved in the new reporting requirements, information Revenue requires you to report on, and how to prepare for the new legislation.

Here’s what we cover:

• What are the Enhanced Reporting Requirements?
• What information is to be included in the report?
• The significance of real-time reporting
• How will payments be submitted to Revenue?
• What your company should do to prepare for Enhanced Reporting Requirements
• What’s coming next for the new legislation?

What are the Enhanced Reporting Requirements?

The Enhanced Reporting Requirements necessitate three categories of non-taxable payments to employees (and paid directors) to be reported to Revenue in real time.

These are the small benefit exemption, remote working daily allowance and travel and subsistence.

This new legislation is part of Finance Act 2022 and introduces Section 897C of the Taxes Consolidation Act 1997, which provides for mandatory real-time reporting of certain reportable benefits provided to employees and directors.

What information is to be included in the report?

As mentioned above, Revenue requires payment information on the small benefit exemption, remote working daily allowance, and travel and subsistence.

In particular, it’s looking for the following details, under each category:

Small benefit exemption

Vouchers or benefits provided to employees that come within the small benefit exemption regime i.e. currently, up to two small benefits each year that don’t exceed a combined value of €1,000.

Remote working daily allowance

In terms of the remote working daily allowance of €3.20, you need to report the following for each employee:

• Total number of days
• Amount paid
• Date paid.

Travel and subsistence

This relates to payments to employees to reimburse business-related travel and subsistence costs, including:

• Vouched travel and subsistence
• Unvouched travel and subsistence, such as civil service mileage rates
• Country money for site-based employees (payment that compensates employees for expenses incurred travelling varying distances to and from building sites and also covering subsistence expenses)
• Emergency travel
• Eating on site allowance.

However, in terms of travel and subsistence, the new reporting requirements are currently limited to payments that are made to an employee.

Where an employer pays expenses directly to the provider on behalf of the employee, such as company credit cards, fuel cards, toll tags, car insurance and motor tax, these payments are not required to be included in the report.

The significance of real-time reporting

A key element of this new reporting obligation is that reporting must be done in real time and the submission to Revenue must be made on or before the payment date to the employee.

So, for instance, if your company pays employees their travel expenses every four months, then this must also be reported to Revenue every four months, and on the same date.

It’s also important to note that none of the guidance on these payments has changed – they just now need to be reported on and in real time.

Employers were already obliged to keep records and Revenue could ask for them if it wanted to. However, in reality, this was rarely done, except maybe if the business was being audited.

As such, the requirement to now submit regular real-time reports is a significant change and will entail significant extra administration.

How will payments be submitted to Revenue?

Reporting is through a new Enhanced Reporting Requirement facility on the Revenue Online Service (ROS), similar to that used for payroll reporting.

It will allow you to submit, amend and correct Enhanced Reporting Requirement data.

You’ll have three options for making Enhanced Reporting Requirement submissions:

1. Completion of an online file
2. File upload
3. Through a third-party software provider.

In terms of third-party software providers, Revenue is currently engaging with these providers to develop this service. A facility is available to enable software providers to test integrations with Revenue systems.

The onus is also on you, as an employer, to ensure that your software provider is aware of this new reporting requirement and that the provider is engaging with Revenue in implementing it.

There is further technical information regarding service integration with Revenue systems on GitHub.

Crucially, reporting will be separate from payroll submissions to ensure the integrity of payroll records.

Employees will also be able to view information submitted by their employer through their myAccount portal.

What your business should do to prepare for Enhanced Reporting Requirements

You need to be ready to submit these reports now.

In terms of your systems:

• Review how you’re currently collating the required information and whether it fits in with the reporting parameters set out by Revenue;
• If the data is collected across other departments than finance, such as human resources, ensure there’s a system in place for collating the data together;
• Determine who is responsible for the reporting and ensure they have the required permissions on ROS.

What’s coming next for the new legislation?

Revenue has confirmed that this initial reporting requirement is only phase one and further employee payments and/or benefits are likely to come within the scope of Enhanced Reporting Requirements in the coming years.

The benefit for Revenue is that it will provide it with increased visibility of tax-free amounts being paid to employees, along with data capable of being analysed for compliance interventions.

However, for employers, there is concern about the added administrative burden of real-time reporting of vouchers and other small non-cash benefits.

As such, stakeholders are continuing to engage with Revenue over this. Whether this may lead to changes will play out over the next few months.

That being said, you should take steps now so your business adheres to this significant change in reporting.

Editor’s note: This article was first published in September 2023 and has been updated for relevance.