Enhanced Employer Reporting - An Enhancement for Revenue but more Reporting for Employers

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: 

1. €3.20 per day remote working payment which employers can provide;
2. Small benefits exemption; and
3. Travel and subsistence (vouched and unvouched travel, subsistence, “country money”, on-site allowances, emergency travel etc).

Details are only starting to emerge from Revenue, leaving a very short time to prepare. However it is already clear that enhanced employer reporting (EER) will bring challenges to employers to be able to collate and report the required information on time in the right format. 

In a significant expansion to current employer tax reporting obligations, Revenue is in the process of implementing a requirement for employers to report certain non-taxable reimbursements or benefits. It is expected that this requirement will come into force from 1 January 2024 for all employers. There are significant practical challenges which employers need to consider and navigate in preparing for EER, and which we will explore in more detail below. There are also potential risks which employers need to be aware of arising from these increased compliance requirements.

“Enhanced” reporting - but who benefits? 

Enhancement here is all about providing more information to Revenue - as a result, Revenue will have enhanced information, enhanced insights 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 (and therefore compliance intervention ‘yield’). Revenue has also confirmed that the three elements of EER (outlined above) are just ‘phase one’ of a planned expansion of requirements for employers to report non-taxable remuneration to Revenue.

 

Preparing your organisation

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 is the data relating to these benefits 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 
• Will the company have access to software or be required to complete manual filings for EER. 

Some organisations may utilise finance systems or expenses tools with self-service or configurable reporting capabilities. Others may be facing compiling information from emails and / or spreadsheets. (Revenue did a consultation questionnaire on EER in early 2023 and they found that half of employers are tracking expenses with manual processes, including 37% of respondents using spreadsheets to record these benefits, and a further 13% using paper-based records).

 

How will the reporting work? 

In terms of 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 should result in 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 is appropriate to own / have visibility of this data, and who should and is capable of undertaking the reporting to Revenue. In reality, a partnership approach between several functions in the organisation will probably be required - making it even more important for organisations to have clarity around their EER.

 

Useful points to be aware of, based on what we know so far

1. A return is required each time 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. 

2. There will be a facility to import / upload a file into ROS, or alternatively an option to manually enter the reporting details one employee at a time via an online form in ROS;

3. General data required includes:

1. Employee details
2. Date of payment
3. Tax Year
4. Employer Reference
5. Employment ID

 4. For each specific element, there are differences in what data must be reported:

• Small Benefit Exemption - the value per employee
• Remote Working Relief - amount paid per employee and the number of days it relates to
• Travel & subsistence - amount paid per employee across a number of categories:

1. Travel vouched;
2. Travel unvouched;
3. Subsistence vouched;
4. Subsistence unvouched;
5. Site Based employees (includes “Country Money”);
6. Emergency travel; and
7. Eating on Site.

Preparing for employee engagement

Revenue has stated that it plans to provide employees with visibility of what their employer is reporting in relation to them. It is expected that the reported information will be available on a per employee basis in the relevant employee’s Revenue myAccount portal. As such, employers also need to plan for employee communications and possible queries around this.

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.

The four key actions to take now

1. Understand the new reporting requirements and identify relevant data owners within your organisation. Consider data quality and timeliness, data flow, reporting capabilities, accountability, etc.

2. Analyse the data before Revenue does. Consider whether any policy or process changes are required - including any retrospective non-compliance which may need to be addressed with Revenue via a self-correction/voluntary disclosure.

3. Educate stakeholders, map and document internal roles and responsibilities, and keep compliance under review - regarding timeliness, quality, completeness of data, and tax risk.

4. Consider what resources you’ll need to manage the reporting - will you use software? does your current provider have a solution? If manual reporting will be used you’ll need to allocate and train resources.