Revenue's Debt Warehousing Scheme

Interest rate on Warehoused Tax Debt reduced to 0%

In keeping with the many changes to taxation incurred in recent years, The Minister for Finance has recently announced that the interest rate on Warehoused Tax Debt has been reduced to 0%. This comes on the heals of many businesses (particularly in the hospitality sector) closing their doors in recent months, citing exponential pressures as the cause.

The Tax Debt Warehousing Scheme was introduced for businesses following the Covid-19 Pandemic, which continues to impact the Irish Business Landscape to this day. The scheme was intended to help businesses experiencing cash flow issues, allowing them to defer payment of some tax liabilities until their cashflow situation improved. Where there was once €3billion owed in tax debt by 110,000 businesses, there is currently €1,72 billion owed by 57,500 businesses under this scheme.

Revenue have confirmed that any businesses who have already paid their warehoused debt at the previous interest rate of 3% will receive a refund of that interest. Revenue have also stressed that there are “flexible payment options available” in respect of warehoused debt in the hopes that more businesses will find themselves in a position to begin clearing this debt. These flexible options include the extension of the payment term beyond the usual 3–5-year term. These decisions will be made on a case-by-case basis.

Minister McGrath has said that “The Government is acutely aware of the ongoing cost pressures faced by businesses and is determined that viable businesses are given every chance to succeed in a challenging trading environment.”

The Finance Minister will be bringing forward legislation to formalise this 0% interest rate change, but Revenue will implement it administratively in the meantime.

All businesses availing of the Tax Debt Warehousing Scheme must engage with Revenue before May 1st, 2024, to either pay their debt in full or discuss a payment plan. All businesses must also file their current tax returns on time and meet current tax liabilities while availing of this scheme.

As always, our advice is to keep ahead of all tax affairs to ensure full compliance, and the key take away here is engagement with Revenue. Rather than the “head in the sand” approach, it is essential to keep in touch with Revenue and arrange payment plans as needed.

Enhanced reporting requirement (ERR) from 1st Jan 2024

We have some important updates regarding the recent changes introduced by the Revenue Commissioners, impacting the way we report certain expenses and benefits to employees and directors.

As of January 1, 2024, the Enhanced Reporting Requirement (ERR) is in effect, requiring employers to report specific details of payments through the ROS system, similar to the current payroll reporting process. As always, we aim to ensure that you are as up to date as possible.

 

What to Report: Small Benefits and Remote Working Allowance.

  • Small Benefits:
    If you provide small benefits such as gift vouchers, gifts for special occasions, or long-term service awards, you must report the date and value of these benefits. The cumulative value should not exceed €1,000 in a tax year. Only the first two qualifying benefits that are exempt. Any subsequent benefit must be taxed and the employer should make the necessary deduction under the PAYE system and report through payroll.
  • Remote Working Allowance: 
    The non-taxable daily allowance for remote workers, aimed at offsetting remote work-related costs, must be reported. This includes the number of days, amount paid, and payment dates.


Travel and Subsistence Payments: Ensuring Compliance.

  • Travel Vouched and Subsistence Vouched: 
    Report date and amount for vouched travel and subsistence expenses, including receipts.
  • Travel Unvouched and Subsistence Unvouched: 
    Specify ‘Flat rate allowances’ within Civil service rates and provide details.
  • Site-Based Employees: 
    Expenses for travel and subsistence may be tax-free for site-based employees, subject to specific rates. Ensure compliance with the 32km (20 miles) requirement.
  • Emergency Travel:
    Report emergency travel expenses at Civil Service rates.
  • Eating on Site Allowance:
    Paid without tax deductions, report this allowance – €5.00 per day.

Please note the Travel and subsistence expenses paid directly through company credit cards where no reimbursement has taken place, this is not in the scope of Enhanced Reporting Requirements

 

How to Report: Choose Your Method

Revenue offers three reporting options:

  1. Third-party software:
    Interface directly with Revenue.
  2. Upload via ROS:
    Submit an expenses/benefits file through ROS.
  3. Manual Submission via ROS:
    Manually submit expenses/benefits through ROS.
    It is important to ensure that all payments are reported separately from payroll, and employees can view submissions in their Revenue myAccount. No receipts need to be uploaded, but we would advise that you retain them in case of any Revenue intervention.

 

Why is Revenue Implementing ERR?

The additional information aims to provide Revenue with better oversight of payroll management. Following the 2022 overhaul of the Compliance Intervention framework, electronic resources will be used to target taxpayers for compliance intervention, resulting in increased desktop compliance checks on payroll taxes.

 

Non-Compliance Consequences: Avoid Penalties

Failure to comply may result in a €4,000 penalty per breach. Correct any misfiled returns before the due date to avoid penalties.

 

Preparing for ERR: Action Points for Employers

  1. Review payment categorisation and record-keeping practices.
  2. Assess the frequency of payments for efficient reporting.
  3. Align policies with legislation and rules.
  4. Establish controls for tracking vouchers and non-cash benefits.
  5. Identify responsible parties for timely and accurate reporting.

Merry Christmas & Opening Dates!

Here at ECOVIS DCA, we would like to thank all our clients for partnering with us in 2023 and we look forward to sharing a successful year ahead.

Wishing you all a very Happy Christmas & Wishing you and your business a prosperous 2024!

We will be closing for business on Thursday the 21st of December and reopening on Tuesday the 2nd of January 2024.

Unlocking Success in 2024

As we step into the unknown of 2024, the landscape of business compliance is ever-evolving. As your trusted advisors, we want all of our clients to be well-prepared for the journey ahead. Revenue have recently introduced Enhanced Reporting Requirements (ERR) that demand a closer look for employers. Let’s take a look at the key changes and how we can navigate these changes together for your continued success.

Starting in 2024, employers dealing with expenses and benefits for their employees and/or directors must adhere to the ERR. These crucial aspects include:

  • Travel and Subsistence.
  • Small Benefit Exemption.
  • Remote Working Daily Allowance.

To simplify the reporting process, Revenue is providing tools to report ERR through third-party software. We strongly recommend engaging with your software providers to ensure a smooth collaboration with Revenue. Technical information for software providers is readily available on the Revenue GitHub page, offering valuable insights for streamlined compliance.

To empower employers with the knowledge needed to navigate ERR effectively, Revenue is hosting free online events throughout December. These events facilitated through Eventbrite, provide an insightful overview of ERR for expenses and benefits related to employees and directors.

The agenda for these events includes:

  • Requesting Employer Reporting Notifications (ERN).
  • Submitting expense/benefit details via file upload or online form.
  • Viewing expenses/benefits by submission type.
  • Exploring an employee’s view in myAccount of submissions made by their employer.

If you are eager to attend these webinars, follow these simple steps:

  • Visit www.revenue.ie/err
  • Click the link to Revenue’s ‘Eventbrite Webpage’.
  • Follow the on-screen instructions to secure your ticket.
  • Eventbrite will keep you in the loop with reminders of the event.

For continuous updates and a comprehensive understanding of ERR, bookmark www.revenue.ie/err. This website will serve as your go-to hub for the latest information and will be updated on a regular basis to help keep you informed as these changes evolve.
As your trusted partner and advisors, we here at EcovisDCA are here to guide you through these changes seamlessly. Should you have any queries or need further assistance, don’t hesitate to reach out to us. Together, let’s make 2024 a year of compliance, growth, and shared success.

Useful Tips For Your Christmas Parties

As we approach the festive party season, we want to take a moment to emphasise the importance of maintaining a safe and respectful environment during work-related social events. While these gatherings are meant to celebrate the hard work and achievements of the past year, it’s crucial for employers to uphold Health and Safety standards for all employees in attendance.

To mitigate the risk of issues such as bullying, harassment, and misconduct arising from these events, we recommend the following preventative measures:
• Inclusive Invitations:
Extend invitations to all employees, even those on extended leave. Inclusivity fosters a positive workplace culture.
• Reiterate Dignity at Work Policy:
Re-circulate the company’s Dignity at Work Policy ahead of any events, explicitly mentioning its applicability to work-related social events.
• Disciplinary Awareness:
Clearly outline the potential disciplinary actions, including dismissal, for breaches of the Dignity at Work policy during social events.
• Communication of Policies:

  • Ensure employees are familiar with the company’s Disciplinary and Grievance Procedures, emphasising the importance of responsible behaviour.
  • Re-circulate the social media Policy ahead of any events to prevent privacy infringements or damage to the company’s reputation resulting from online posts.
  • Communicate the company’s Absence Policy for events scheduled on work nights, promoting responsible attendance.
  • Brief management on policies and procedures, empowering them to address inappropriate behaviour should it occur.

• Conversation Guidelines:
Advise against discussions on sensitive topics to avoid potential conflicts.
• Accessible Venues:
Ensure event locations are accessible to all employees, including those with disabilities.
• Dietary Considerations:
Select venues that cater to various dietary requirements to accommodate all employees.
• Safe Transit Options:
Encourage safe transit home by providing details of local public transport or suggesting prebooking taxis.
• Zero Tolerance for Driving Under the Influence:
Take a strong stance against driving under the influence, prioritising the safety of all employees.
Additionally, in the spirit of inclusivity, consider rebranding the Christmas Party as an “End of Year Celebration” to make all employees feel welcome or make it clear that the celebration of Christmas is not a requirement of celebrating this event.

New requirements to provide a PPSN

In this ever-evolving landscape of corporate compliance, it is essential to keep up to date with all the latest regulations. There have been a great many changes to how business is done, and payments are made in the last couple of months, and it is essential to not fall behind the times on regulations. One such change that came into effect on June 11th, 2023, is the requirement for company directors to provide their PPSN when filing specific forms to the Companies Registration Office (CRO). Here at EcovisDCA, we are committed to keeping you informed and helping you to navigate these changes seamlessly.

What You Need to Know:

The new requirement for a PPSN to be provided in several key situations:

  • Company Incorporation – When registering a new company.
  • Filing of Annual Return
  • Directorship Changes – When a new director appointment is made, or any changes are made to the current director’s details.

In a case where a director does not have a PPSN but has a Register of Beneficial Owners (RBO) number, the RBO number can be used in place of a PPSN. In the event that a director has neither, an Identified Person Number (IPN) can be applied for.

The IPN is a unique number issued by the CRO to directors or beneficial owners who don’t possess either a PPSN or RBO number. Consult the CRO website for further information.

Preparation is Key:

To ensure a smooth and compliant filing process, it’s vital to verify all information related to your company’s directors well in advance of the filing date. If it’s necessary to apply for an IPN, it should be done as early as possible also. Whilst the CRO strives to process IPN applications promptly, processing times can vary depending on application volumes. The sooner you apply, the better.

Name Discrepancies:

Another important point to note is that a director may use a different name on the CRO register than the one held by the Department of Social Protection (DSP). To avoid delays in the registration process, ensure that all director data on the CRO form is accurate.

At EcovisDCA, we understand the importance of staying compliant with the latest regulatory changes. We’re here to guide you through these transitions, ensuring your company operates smoothly and within the law. Stay informed, stay compliant and let us be your guide through this journey.

What’s the Outlook for Pensions in Ireland Going Forward?

The pension landscape has undergone significant transformation over the past year. Before January 2023, any employer contributions to an employee’s Personal Retirement Savings Account (PRSA) were treated as a Benefit in Kind (BIK), unless the employee hadn’t exhausted their personal contribution limits. In that case, non-BIK employer contributions were allowed.

However, as of January 1, 2023, a remarkable change has occurred, there are no longer limits on employer contributions to an employee’s PRSA. This is groundbreaking news and represents one of the most substantial shifts in the pension landscape in two decades. It’s worth emphasizing that the standard fund threshold of €2.15 million remains applicable.

Earlier in the year, there were concerns about the continuity of this PRSA opportunity. However, Chapter 24.3 of the Revenue Manual has been updated to confirm that PRSA contributions are allowed without any BIK implications. This empowers employees and directors to maximize their personal contributions while also receiving employer contributions without facing penalties in the form of BIK.

Discussions about implementing auto-enrolment are ongoing, with the launch scheduled for Q3 2024. Live implementation may not occur until 2025. Employers are strongly advised to consult a financial advisor promptly to clarify their options and establish funding objectives for their employees’ pensions.

The proposed auto-enrolment plan would encompass anyone earning over €20,000 annually and aged between 23 and 60, involving them in a private pension scheme. Initially, as many as 800,000 workers are expected to be affected once the scheme becomes operational.

However, there are concerns that this may not be the ideal solution for everyone involved, and some employers might find an employer-sponsored PRSA or group Defined Contribution (DC) scheme to be a better fit.

Here are some noteworthy points to consider:

  • There is no tax relief at either 20% or 40% on employee contributions, as there would be with a personal pension.
  • Once enrolled, individuals cannot opt out, with a maximum suspension period of two years.
  • Employees in their probation period with a new employer who have not yet joined the company pension scheme will be automatically enrolled.
  • Investment choices are not available, and the government determines how the funds are invested.
  • Access to savings is only possible at the state pension age.
  • Transfers in or out of the government pension scheme are not permitted.
  • Additional contributions cannot be made.

It’s important to note that these points may undergo changes, this inflexible structure may not be the most suitable option for all. Therefore, it is crucial for all employers to consult a financial advisor in the coming months to determine the best course of action for their company.

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We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

Budget 2024

It’s the most wonderful time of the year – no, Santa isn’t on the way down the chimney just yet, it’s Budget announcement time. Budget 2024 was announced on October 10th with slightly less fanfare and dramatic predictions preceding this year’s announcement.

As always, we have compiled the main points which may be of interest to you, your business, and your clients from this year’s Budget announcement.

 

Business Owners and Entrepreneurs:

  • €250 million package announced for SMEs to moderate the impact of high energy costs.
  • Research and Development tax Credit to be increased to 30%.
  • Employment Investment Scheme claim amount doubled to €500,000.
  • Key Employee Engagement Programme extended into 2025.
  • An increase in Minimum Wage.
  • The tapering mechanism applied to benefit in kind relief for electric vehicles is being enhanced by extending the current Original Market Value deduction of €35,000 until the end of 2025, which in addition to the €10,000 above, means a deduction of up to €45,000 on the OMV.

Tax:

This year’s Budget announcement included quite a significant tax package (worth €1.3billion to be precise) which will be welcome news to all workers. The key points of this included:

  • Companies that are part of groups with revenues of €750M and above liable to tax @ 15%
  • An increase in tax credits by €100 to €1,875.
  • An increase in the ceiling for USC by €2,840 to €25,760.
  • An increase to the Standard Rate Band by €2,000 to €42,000.
  • A change in the higher rate of USC will reduce by 0.5% to 4%.
  • There will however be phased increases in PRSI.

 

Mortgages and Housing:

A new once-off scheme will give certain homeowners who have seen a sharp increase in their interest rates 20% tax relief on the increased amount paid in 2022 compared to 2023. This is set to benefit up to 160,000 homeowners.

 

Housing:

  • Rental tax credit to be increased from €500 to €750 – also applicable to parents paying for student children in full-time accommodation.
  • Landlords to benefit from a tax break which will rise each year they stay in the market until 2027.
  • Help to Buy Scheme extended to the end of 2025.
  • There will be a €250 million package for small and medium firms designed to help with the costs of doing business. It is intended to be less cumbersome than previous schemes designed to moderate the impact of high energy costs, and it is expected businesses will receive a once-off grant worth up to 50 per cent of their rates.

This year’s Budget also included a heavy focus on the area of Climate Change as well as the announcement of a new savings fund called the “Future Ireland Fund” which will utilise some corporate tax receipts.

We hope this breakdown has been informative for you and we look forward to sharing more in the coming days.

Enhanced Reporting Requirements

Section 9 of Finance Act 2022 introduced the requirement for notifications by employers to Revenue in relation to certain reportable benefits.
This is a new reporting requirement, defining reportable benefits as:

  1. a small benefit
  2. a remote working daily allowance, or
  3. a travel and subsistence payment

The introduction of the reporting requirement is subject to commencement order, with the target date of 1st January 2024. Regulations are made under s986 and can only be made when commencement order takes effect, likely to be available before year-end.

  • Only incurred expenses will need to be reported. The use of a company credit card or prepaid cards is currently not within the scope of ERR as it does not involve a payment to the EE by the ER.
  • Only reporting of payments made to employees or directors as set out in the legislation will be required. Payments to individuals who are neither an employee or director are currently not within the scope of the ERR.
  • Items such as fuel cards, toll tags, car insurance and motor tax if paid by the employer are currently not within the scope of ERR as no payment has been made to an employee or director.
  • Any payment made which exceeds the thresholds will be subject to the normal rules for taxable payments.

Employers will need to develop and/or update their expense systems to ensure it can capture the detail to be reported to Revenue. Where the employer’s expense system is not able to extract the required level of detail, the submission may be rejected or require a manual update of individual ERR submissions.

‘The requirement to disclose reportable benefits ‘on or before’ they are paid or provided to the employees/directors means employers will need to ensure there is timely communication between the various areas of the business providing these benefits (e.g., the expense team/finance team/line management) and the team responsible for ERR (whether that is payroll or Finance or an external payroll agent).

For vouchers and non-cash benefits which will avail of the small benefit exemption, this requires that, in advance of a voucher/hamper/gift being provided to an employee or director, the relevant team or person providing that benefit must have notified the internal team responsible for ERR.

For payments to employees/directors in respect of non-taxable Travel and/or Subsistence, employers will need to consider internal processes around the timing of such payments, i.e., a set payment date per month, to ensure the relevant team responsible for ERR has been notified of the details of such payments before they are made to employees/directors.

Employers need to review their current procedures around the relevant benefits/expenses and begin to map out processes to be followed that will enable the organisation to comply with the new requirements.

Some areas for consideration include the following:

  • How frequently employers are paying out these types of payments?
  • Should the frequency of these payments be standardised in light of the ‘on or before’ requirement?
  • Which teams and areas of the business are making these payments and are they interacting regularly with payroll?
  • Should internal controls be reviewed to ensure the relevant payments will be captured?
  • Are the existing policies/procedures in respect of remote working, travel and subsistence, and the small benefit exemption compliant with current Revenue rules? For example, who is reviewing eligibility for the small benefit exemption and are awards tracked and documented to ensure no employee receives more than the allowable amount?
  • Are current policies/procedures being followed in practice?

Taking the above into consideration, employers should set out a formal policy or process which sets out the roles, responsibilities and actions required from each of the relevant areas of the business. Staff will need to be upskilled and made aware of their new responsibilities to ensure the correct information is reported at the correct time.

The Rent Tax Credit

With the ever-increasing cost of living here in Ireland, it is important to be aware of all reliefs available. It has emerged recently that many tenants in Ireland are unaware of the existence of the Rent Tax Credit, which could be of assistance to many renters in Ireland. It has been reported that around half of the eligible renters in Ireland are availing of this Rent Tax Credit.

With rental prices in Ireland reaching new highs of late, renters are naturally seeking out any assistance available. The Rent Tax Credit is available for the tax years 2022 to 2025 and reduces the amount of Income Tax that you are due to pay for a tax year. The amount of credit you can claim will be calculated when you submit your claim and will depend on the amount of rent you pay as well as the amount of Income Tax you pay.
If you have PAYE Income, this application process can be done through myAccount, and you may also apply for the 2023 year in real time by choosing the “Manage Your Tax 2023” option. The maximum value of Rent Tax Credit that can be claimed is €1,000 per year for a jointly assessed married couple or civil partners, this is halved to €500 for all other individuals.

The requirements for this Tax Credit are:

  • The property must be your principal private residence.
  • Another property used for work or study on an approved course.
  • A property used by your child to facilitate attendance on an approved course.
  • Tenancy must be registered with the RTB (Residential Tenancies Board).
  • Landlord must not be a housing association or an “approved housing body.”
  • You must also not be in receipt of State Assistance for accommodation including the HAP Scheme, Rent Supplement, or the Rental Accommodation Scheme.
  • Your landlord must also not be your parent.

The scheme currently runs from 2022-2025, with a possibility of this being extended past this date. It has been reported that many eligible renters are not claiming this relief for various reasons, including the daunting nature of filing your own tax return, issues with landlord, not having the appropriate documentation available, or simply not knowing about the availability of this Tax Credit.

We would as always advice to prep all documentation in advance and provide as much information as possible including the RTB number of your tenancy.

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.