Enhanced employer reporting: what to know

Enhanced employer reporting will necessitate prompt collation and submission of data in the correct format. Doone O’Doherty explores the practical challenges employers need to address and outlines four key actions to prepare for this new initiative

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: 

• €3.20 per day remote working payment, which employers can provide;
• Small Benefits Exemption; and
• travel and subsistence.

Details are only starting to emerge from Revenue, leaving a very short timeframe for preparation.

However, it is already clear that enhanced employer reporting (EER) will challenge employers to collate and report the required information on time in the correct format.

There are significant practical challenges that employers need to consider and navigate in preparing for EER, on top of potential risks that they need to be aware of arising from these increased compliance requirements.

“Enhanced” reporting – who benefits? 

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

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

How will the reporting work? 

Regarding 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 should own/have visibility of this data 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 critical for organisations to have clarity around their EER.

Requirements for reporting

A return is required when 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. 

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

General data required includes:

• Employee details;
• Date of payment;
• Tax year;
• Employer reference; and
• Employment ID.

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

• Small Benefit Exemption: the value per employee;
• Remote Working Relief: the amount paid per employee and the number of days it relates to;
• Travel and subsistence: the amount paid per employee across several categories:
  • Travel vouched and unvouched;
  • Subsistence vouched and unvouched;
  • Site-based employees (includes “country money”);
  • Emergency travel; and
  • Eating on-site.

Preparing for employee engagement

Revenue has stated that it plans to give employees visibility of what their employer reports about them. The reported information is expected to 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. 

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 that 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, and does your current provider have a solution? If manual reporting is used, you must allocate and train resources.

Doone O’Doherty is Tax Partner at PwC