Employers- Enhanced Reporting Requirements (ERR)
Enhanced employer reporting: new requirements from 01.01.2024
From 1 January 2024, all employers will be required to report to Revenue, on a real-time basis, three categories of non-taxable employee remuneration:
- €3.20 per day remote working payment, which employers can provide;
- Small Benefits Exemption; and
- travel and subsistence.
Details are only starting to emerge from Revenue, leaving a very short timeframe for preparation.
However, it is already clear that enhanced employer reporting (EER) will challenge employers to gather and report the required information on time in the correct format.
There are significant practical challenges that employers need to consider and navigate in preparing for EER, on top of potential additional costs that they need to be aware of arising from these increased compliance requirements.
Enhancement is all about providing more information to Revenue. As a result, Revenue will have enhanced information and enhanced data to interrogate. Revenue has stated it intends to utilise the information received via EER to target its Revenue audit resources where it perceives the highest risk of non-compliance to arise.
What do you, as an employer need to do
From a practical perspective, each employer needs to consider:
- whether it provides any of these reportable non-taxable reimbursements/benefits to employees;
- what internal systems/processes/policies apply to these benefits;
- how and where the data relating to these benefits is recorded and how the data is to be extracted in the format required for reporting in real-time;
- who in the organisation will be responsible for reporting to Revenue; and
- if the company will have access to software or be required to complete manual filings for EER.
How will you, an employer, record the necessary data
Some organisations may utilise finance systems or expense tools with self-service capabilities or other online functions. Others may use information from emails or spreadsheets.
How will the reporting work on ROS?
Regarding getting the information to Revenue, EER will be a separate ‘service’ or tax head area on ROS, likely similar to how share scheme reporting is currently managed. This separation of EER from standard employer PAYE reporting is designed to ensure privacy/separation of EER data from full payroll remuneration.
But the EER data is still employee-specific, and each organisation will have to decide who should have visibility of this data and is capable of undertaking the reporting to Revenue. A collaborative approach between several functions in the organisation will probably be required in larger organisations, making it even more critical for businesses to have clarity around their EER.
The information needed to complete the ERR return
A return is required when any employee receives any of the reportable EER elements. The return must be made “on or before” the date the reimbursement or tax-free benefit is provided to the employee. There will be a facility to import/upload a file into ROS or manually enter the reporting details one employee at a time via an online form in ROS.
General data required includes:
- Employee details;
- Date of payment;
- Tax year;
- Employer reference; and
- Employment ID.
For each specific element, there are differences in what data must be reported:
- Small Benefit Exemption: the value per employee;
- Remote Working Relief: the amount paid per employee and the number of days it relates to;
- Travel and subsistence: the amount paid per employee across several categories:
- Travel vouched and un-vouched;
- Subsistence vouched and un-vouched;
- Site-based employees (includes “country money”);
- Emergency travel; and
- Eating on-site.
Five things to consider now
- Understand the new reporting requirements and identify relevant data sources within your organisation. Consider data quality and timeliness, data flow, reporting capabilities, accountability, etc.
- Analyse the data before Revenue does. Consider whether any policy or process changes are required, including any retrospective non-compliance that may need to be addressed with Revenue via a self-correction/voluntary disclosure. If changes are made to the expense reimbursement, e.g. frequency, policy or process in preparation for EER, this will likely also necessitate employee engagement.
- Document internal roles and responsibilities, and keep compliance under review regarding timeliness, quality, completeness of data and tax risk.
- Consider what resources you’ll need to manage the reporting. Will you use software, and does your current provider have a solution? If manual reporting is used, you must allocate and train resources.
- Keep an eye out for communications about ERR from Revenue and consider registering for one of the free webinars Revenue intend to run over the Autumn to bring employers through the changes – you will find information at https://www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/reporting-jan-2024/index.aspx
If you need help with planning for ERR or advice in relation to developing remuneration packages we are here to help. Please contact a member of our tax team.