People Advisory Services

Employer update - June 2024

Enhanced Reporting Requirements (ERR) Update

Revenue had previously advised that the more ‘relaxed’ approach towards Enhanced Reporting Requirements (ERR) was to end on 30 June 2024. Last week Revenue confirmed in a Tax Administration Liaison Committee (TALC) ERR Sub-committee meeting with stakeholders that the period of “service for compliance” in respect of ERR will continue for the remainder of 2024.  This alert aims to provide clarity to these recent changes.

1. Service-Oriented Compliance Approach: This means that there will be no ERR penalties imposed, or compliance interventions initiated in 2024. It is important to note that this approach is designed to assist employers in adapting to the ERR filing requirements without the immediate pressure of penalties.

2. Filing Expectations from 1 July: Starting from 1 July 2024, the Revenue Commissioners expect employers who have not already filed to begin filing for ERR purposes. This is an important date to mark on your calendar to ensure that your business is compliant with the new filing expectations.

In addition, during the TALC sub-committee meeting with stakeholders, Revenue representatives advised:

1. Nudge Campaign for Business Division: As outlined in our prior Alert in May, a nudge campaign by some divisions within Revenue had commenced.  It was confirmed a wider nudge campaign will commence this week targeting approximately 79,000 employers. A notice will be issued to these employers to remind and encourage them to comply with the ERR filing requirements. Please check your ROS inbox for this important communication

2. Assessment of Employer ERR Data: Throughout 2024, Revenue will assess the employer ERR data received. This data will play a crucial role in informing decisions in 2025 and beyond regarding risk assessments. Employer behaviour, such as timely compliance with filing requirements, will also influence risk assessments. Employers who fail to file for ERR purposes by the end of this year may be considered to have an increased risk profile.

3. Recommendation on Backdating Filing: Revenue verbally confirmed in the last sub-committee meeting that that employers do not have to backdate their ERR filings to 1 January 2024, however, this has not been formally documented.  In addition, it is recommended that all payments and awards subject to ERR are recorded for good record-keeping practices and to keep track of all payments/awards subject to the small benefit concession etc.

For employers who have not previously reported and do not commence reporting on 1 July (e.g., start reporting in August), Revenue will expect these employers to backdate their reporting to 1 July 2024 at a minimum.

4. Current Statistics: As of 31 May 2024, approximately 36,000 employers have made ERR filings, with more than €560 million reported across the three categories. Of this, €500 million relates to Travel & Subsistence (T&S). Revenue have noted that the number of employers filing is lower than expected, which underscores the importance of compliance moving forward.

EY View

This extension to the relaxed approach is a welcomed update from Revenue however we urge our clients to take these updates into consideration and ensure that your business is prepared to meet the ERR filing requirements from 1 July 2024. Even though Revenue will not issue penalties, they will be tracking compliance with ERR reporting by employers and this may influence future Revenue profiling of clients.

What to do next?

If you are struggling to complete or meet your ERR obligations, EY is able to assist employers by offering comprehensive support. Our services include:

• Managed ERR service on behalf of employers – including the preparation of ERR reports, conversion of the files and submission of the reports to Revenue
• Offering a conversion solution for employers experiencing difficulties in converting data to JSON or XML file format
• Advisory assistance for ERR reporting and practical changes to expense reporting and internal policies

Our service can be customised to suit client needs, including data type and reporting frequency. Employers should act now to ensure they are ready. For further assistance, please contact your EY representative.

Self-Correction 

Revenue’s Code of Practice for Revenue Compliance Interventions outlines a range of opportunities for taxpayers to manage and regularise their tax compliance position if an error or mistake has been identified for a particular tax.  To support voluntary compliance taxpayers can make a self-correction without penalty submission to Revenue. 

Self-Correction for 2023 Payroll Returns

Background

This correction can be made without a penalty but statutory interest for any underpaid tax will apply.  A self-correction without penalty can be a useful tool for employers who have identified errors or omissions in their payroll records, payroll tax returns and taxes paid to Revenue.  A time limit for when the self-correction without penalty facility can be utilised applies:  

• For 2023 payroll tax return, whether a single monthly payroll return, various monthly returns or all payroll returns for the full 2023 tax year, a self-correction without penalty must be submitted to Revenue by the filing deadline for 2023 Income Tax Return for the business or Corporation Tax Return, whichever is relevant. 
• Where there is no Income Tax nor Corporation Tax Return filing obligation, a 2023 self-correction without penalty to the payroll records must be submitted to Revenue by 31 October 2024.

If the above time limits have passed, an employer who identifies errors or omissions in their 2023 payroll records can then only correct their payroll records by making an unprompted qualifying disclosure (provided Revenue have not raised a Level 2 or 3 compliance intervention for the same tax year).

To make a self-correction without penalty an employer must:

1. Notify Revenue, within the applicable timeframe either in writing or through ROS of the adjustments being made,
2. The taxpayer provides a computation of the correct tax liability and statutory interest payable, and
3. Payment, in full, accompanies the submission.

It should be noted that a self-correction without penalty will not trigger a compliance intervention, however, may initiate an intervention if a risk is identified by Revenue.

A self-correction without penalty may not be available to some businesses where a level 2 or 3 compliance intervention has already been initiated by Revenue for that particular period or where errors have occurred involving deliberate default.

What to do next?

If you have concerns around your 2023 payroll records or wish to make a submission to Revenue to regularise your compliance, please contact your EY representative for further assistance.

Gender Pay Gap Reporting Introduction 

June marks a pivotal period for Gender Pay Gap Reporting, as organisations are mandated to designate a 'snapshot' date within this month for the pertinent reporting year. This reporting deadline is established as six months after the snapshot date. It is imperative to note that the remuneration data utilised for these calculations should represent the employees' earnings over the previous 12-month period leading up to the selected snapshot date. For example, if you decide that 30 June 2024 is your snapshot date then you need to collate your data from 1 July 2023 to 30 June 2024 and then you have until 30 December 2024 to publish your GPG report.

Background

The 2024 Gender Pay Gap Regulations have recently been revised to enhance the scope, accuracy and integrity of gender pay gap reporting. These amendments are effective immediately and need to be adopted in the 2024 reports.

Key updates include:

1. Expansion of Applicability: The threshold for mandatory reporting has been lowered as expected to encompass organisations with 150 or more employees, thereby extending the regulations' coverage.
2. Redefinition of Basic Pay: It has been clarified that 'Basic pay' includes payments made to employees during leave, incorporating adoptive, maternity, parentals, and paternity benefits as per the Social Welfare Consolidation Act 2005.
3. Inclusion of Additional Benefits: The scope of 'benefit in kind' has been expanded to include non-cash benefits with a quantifiable monetary value, such as share options and interests in shares, which were previously categorised under 'Bonus pay.'
4. Calculation Method Adjustments: The methodology for determining the total annual hours worked has been refined. The numerical value used as the weekly multiplier has been updated from "52.14" to "52.18" to more accurately reflect the average number of workable weeks in a year.

What to do next?

EY and EY Law can help employers with their immediate requirement to analyse and collate the pay data and produce the report for 2024. EY and EY Law have collaborated with diverse clients across various sectors and industries to support with their Gender Pay Gap reporting. We have developed a bespoke approach and unique insight into GPG reporting that can aid organisations and employers to manage their gender pay gap journey. If you have concerns around your Gender Pay Gap Reporting, please contact your EY contact for further assistance.

Contacts

If you require further information, please call your regular contact in EY or contact any of the following:

Michael Rooney
Partner
T: + 353 1 221 2857 | E: michael.rooney@ie.ey.com

Rachel Dillon
Partner
T: + 353 1 221 2554 | E: rachel.dillon@ie.ey.com

Marie Caulfield
Partner
T: + 353 1 221 1416 | E: marie.caulfield@ie.ey.com

Colin Spence
Director
T: + 353 1 221 1240 | E: colin.spence@ie.ey.com

Jennifer Sweeney
Director
T: + 353 1 479 4007 | E: jennifer.sweeney1@ie.ey.com

Caoimhe Neary
Director
T: + 353 1 478 6579 | E: caoimhe.neary@ie.ey.com

Elaine O’Gara
Director
T: + 353 087 490 2947 | E: elaine.o.gara@ie.ey.com

Jake Higgitt
Director
T: + 353 21 480 2877 | E: jake.higgitt@ie.ey.com

Waterford

Gillian Moore
Director
T: + 353 1 479 2216 | E: gillian.m.moore@ie.ey.com

Louise Cadogan
Director
T: +353 5 184 0358 | E: louise.cadogan@ie.ey.com

Cork

Peter O’Connor
Director
T: + 353 2 148 02843 | E: peter.oconnor@ie.ey.com

EY Law

Deirdre Malone
Partner
T: +353 21 480 5729 | E: deirdre.malone@ie.ey.com