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.