Revenue has published the Karshan Disclosure Opportunity Guidance, outlining detailed information regarding possible settlement arrangements arising from the Supreme Court’s decision in Revenue Commissioners v Karshan (Midlands) Ltd. This follows the publication in May 2024 of the Revenue Guidelines for Determining Employment Status for Tax Purposes, which was update to reflect the decision in Karshan.
In a recent press release, Revenue notes that “the judgment changed the understanding of the correct legal principles and legal tests to apply in determining whether an employer had correctly classified workers as employees or as self-employed”.
Where a business or employer deems that it is necessary to make a disclosure and that disclosure can be treated under the new guidance, the disclosure must be made no later than Friday, 30 January 2026.
In the new guidance note, Revenue states the following:
“Revenue invites employers impacted by the Supreme Court ruling to make a disclosure in respect of 2024 and 2025. Revenue will treat any adjustment of liability in respect of both years as a “technical adjustment” as provided for in the Code of Practice for Revenue Compliance Interventions. This means that Revenue will not consider liabilities to have arisen from either deliberate or careless behaviour and a tax-geared penalty shall not apply to any liabilities to Income Tax, USC and PRSI in respect of these years. In addition, fixed penalties will not apply.”
At the time that the judgment was released, the Institute engaged extensively with Revenue through the Tax Administration Liaison Committee. You can find links to the various meetings where this issue was discussed below:
As part of our engagement with Revenue through TALC, the Institute, under the auspices of the CCAB-I also provided feedback on the judgment. While our understanding did not reflect Revenue’s interpretation in certain areas, the process provides the appropriate forum for a detailed understanding of the judgment and its implications.
LOADING...