The Enhanced Reporting Requirements (ERR) introduced by the Finance Act 2022 have significantly changed payroll reporting for employers in Ireland. Effective January 1, 2024, these requirements mandate detailed reporting of certain expenses and benefits provided to employees and directors. This initiative aims to increase transparency and ensure compliance with tax regulations.
Key Components of ERR
1. Scope of Reporting: Employers must report details of various expenses and benefits, including travel and subsistence allowances, remote working daily allowances, and items qualifying for the Small Benefit exemption, provided they are paid without tax deduction.
2. Reporting Mechanisms: Employers can submit the required information through the Revenue Online Service (ROS). This can be done manually or through payroll software integration, similar to the existing payroll reporting processes.
3. Submission Deadlines: The details of these expenses or benefits must be submitted to the employee on or before the payment date. This ensures that the information is up-to-date and accurately reflects the financial transactions.
4. Compliance and Penalties: Adhering to these enhanced reporting requirements is crucial for maintaining compliance with tax laws. Failure to comply can result in penalties and increased scrutiny from the Revenue Commissioners.
Compliance Review
Revenue will commence compliance reviews in January 2025 to ensure employers adhere to the new reporting requirements. These reviews will assess the accuracy and completeness of the reported information, and any discrepancies may lead to further investigation and potential penalties.
Benefits of ERR
The introduction of ERR aims to streamline the reporting process and enhance the accuracy of financial data submitted to the Revenue Commissioners. By providing detailed information on expenses and benefits, employers can ensure they meet their tax obligations and avoid potential penalties. Additionally, this increased transparency helps build trust with employees and stakeholders, demonstrating a commitment to compliance and ethical business practices.
The Enhanced Reporting Requirements for payroll reporting represent a significant step towards greater transparency and compliance in Ireland’s tax system. Employers must familiarise themselves with these new requirements and ensure they have the necessary systems to meet their reporting obligations. By doing so, they can avoid penalties, maintain compliance, and contribute to a more transparent and efficient tax system.