Enhanced Reporting Requirements: Everything you need to know

From the 1st of January 2024, the introduction of Section 897C into The Finance Act 2022, known as the Enhanced Reporting Requirements, will require employers/payroll processors to provide real-time reporting on specific tax-free payments made to PAYE workers and directors. Find out about the changes now!

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What are the changes and what is the Enhanced Reporting Requirements?  

From the 1st of January 2024, the introduction of Section 897C into The Finance Act 2022, known as the Enhanced Reporting Requirements, will require employers/payroll processors to provide real-time reporting on specific tax-free payments made to PAYE workers and directors.  

This is part of a phased introduction of additional reporting for employers/payroll processors in respect of the provision of other benefits or payments to employees/PAYE workers and directors which have not been subject to tax through the payroll system. 

What tax free payments is it relating to?  

The first phase of the Enhanced Reporting Requirement focuses on the reporting of the following tax-free payments: 

  • Travel and subsistence payments. 
  • Small benefits falling under the Small Benefit Exemption. 
  • Remote working daily allowance of €3.20  

Small Benefit Exemption Scheme: Since January 2022, directors and PAYE workers have been eligible to receive up to two tax-free small benefits annually, with a combined value not exceeding €1,000. These benefits are usually given in the form of a voucher.  

Under the Enhanced Reporting Requirements, the values and dates of payment must be declared to Revenue.  

Remote Working Daily Allowance: You can make a payment of €3.20 per workday to a remote working employee without deducting Income Tax, PRSI and USC to cover expenses incurred such as broadband, heating and electricity costs. 

Where a Remote Working daily allowance is paid, you will be required to report the following: 

  • the total number of days claimed; 
  • the amount paid; and  
  • the date paid. 

Travel and Subsistence: Under the Enhanced Reporting Requirements, unvouched and vouched travel and subsistence reimbursements must be declared. Vouched expenses are those for which supporting documents or receipts are provided as evidence. Unvouched expenses, on the other hand, are when there were no receipts or other supporting documents provided e.g. civil service rates for mileage and subsistence. 

The total amounts paid to the employee/director and the dates of payment must be declared under the Enhanced Reporting Requirements.  

How will this impact me as an Icon Accounting contractor?  

For fully managed clients under the Umbrella Company or Personal Limited Company solutions, there will be no change to the current expense claiming process. Icon Accounting will declare the specified three tax-free payments to Revenue on behalf of fully managed clients during payroll processing. These clients should continue to report expenses as usual through the Icon Accounting App or Portal. 

Non-fully managed clients (Icon Accounting clients opting for an annual solution) need to be aware that they are responsible for declaring tax-free payments to Revenue when managing payroll. If Icon Accounting are submitting the payroll to Revenue on your behalf, you will need to make your account manager aware of these tax-free payments so they can be submitted to Revenue in real time. 

When are they required to be declared to Revenue?  

Payments are required to be submitted to Revenue via the ROS system on or before the date of payment to the employee/director.  

What should I do if you have any questions?  

Contractors can contact their dedicated account manager directly or reach out to the Icon Accounting team at 01-8077106 or info@iconaccounting.ie for any questions they may have on the Enhanced Reporting Requirements changes.   

Author

Lyndsay Kealy

Compliance

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