Accountants warn new Revenue expenses rules could leave workers ‘out of pocket’

Accountants warn new Revenue expenses rules could leave workers ‘out of pocket’

Real-time reporting of benefits to cause practical difficulties, body claims.
New enhanced reporting requirements by Revenue on expense payments could result in “employees being ‘out-of-pocket’ for weeks at a time”, it is claimed.

A grouping of the main accountancy bodies in Ireland – the Consultative Committee of Accountancy Bodies Ireland (CCAB-I) – has written to Finance Minister Michael McGrath to raise “grave concerns” about the requirement that comes into effect on January 1, 2024.

Cróna Clohisey, tax and public policy lead at Chartered Accountants Ireland, part of CCAB-I, told the Sunday Independent that she was “deeply concerned” about the timing of the implementation of new rules that would impact every employer in the country.

An information campaign planned by Revenue on the issue in the coming weeks “may be too little too late”, she said. “Every single tax-free benefit or payment made to a worker, which will include ad-hoc items like an Easter egg or a bunch of flowers on the birth of a child, must be reported to Revenue at the time or even before it is made,” she said. “We know from speaking to accountants that this real-time reporting requirement is going to cause all manner of practical difficulties for employers, many of whom are trying to operate as best they can against rising costs and staff constraints.”

An annual reporting requirement would be more practical, she said.
The new requirements require “real-time” reporting of non-taxable benefits and payments, for example remote working daily allowances and travel and subsistence payments.

This did not reflect how such benefits were administered in practice, warned CCAB-I chair Enda Faughnan in a letter to Minister McGrath last week. The remote working allowance and travel and subsistence expenses were not “benefits”, he wrote. “Rather, these payments are a cost of doing business and do not form part of the employee’s remuneration. It will be a disproportionate use of employer resources (both from a time and cost perspective) to require employers to implement a payroll-like process for non-taxable reimbursements, where the primary aim of the reporting is data collection, and no tax collection is involved,” it said.

In response to queries, Revenue said that an interim period since the introduction of the provision by the Finance Act 2022 “allows sufficient time for stakeholder engagement on the successful implementation of the measure”.

Revenue had designed the reporting requirements to seamlessly integrate with all payment processes, and had issued invites to over 320,000 employers, software providers and agents to participate in a survey on the implementation of this measure.​