News Uncategorized


Enhanced Reporting Requirements for Payroll from 1st January 2024

The new Enhanced Reporting Requirements (ERR) for certain non-taxable benefits are due to come into effect from 1 January 2024. Currently, employers submit details of all reckonable earnings paid to each of their employees. The ERR sees the introduction of an entirely separate submission. ERR reporting is a new obligation concerning employer returns for certain non-taxable payments of expenses and benefits to employees. This will be the case regardless of whether these payments are processed through a company’s payroll system or via an expenses protocol operated by the employer. There are 3 categories of expenses and benefits included under the ERR system as follows:   1.Travel and Subsistence Tax free expense payments in this category that will require to be reported under ERR will include payments for:
  • Travel - vouched and unvouched.
  • Subsistence - vouched and unvouched.
  • Emergency travel.
  • Eating on Site.
  • Site – based employees.
Payments for “Country Money”, which can be received by employees, involved in the construction and related sectors are covered within this category.   2. Small Benefit Exemption Amounts paid in vouchers, subject to an annual maximum of two benefits per employee not exceeding a total of €1,000.   3. Remote Working Relief (daily allowance) The number of days and the amount paid, with a payment of not more than €3.20 per day for the days an employee performs employment duties from their residence. The use of company credit cards or prepaid cards aren’t currently in the scope of ERR. Also excluded are fuel cards, toll tags, car insurance, and motor tax paid by an employer. These payments are excluded as no payment has been made directly to employees or directors by an employer.   The pressure points for employers can be categorised under three headings: 1.Systems integration issues: Many employers do not have integrated payroll and expense systems and this could lead to practical difficulties in complying with ERR obligations on a timely basis, given the requirement to report details 'on or before' the making of a payment or reportable benefit.  For travel and subsistence payments, employers may need to consider making reimbursements less frequently (perhaps monthly) to reduce the administrative burden of making multiple reports.  Employees may take an adverse view of this as it will delay their reimbursement. 2. Timing issues for small benefits: Given the broad nature of what can be considered for the purposes of the small benefit exemption, clear timing issues may arise with reporting, particularly where the benefit is of an ad hoc or unexpected nature.   3. Steps that should be taken by employers in preparation for the reporting requirements of ERR:
  • Identify the system(s) used to pay expenses such as travel, subsistence, working from home and small expenses, are they paid via payroll or ad hoc payments.
  • Establish whether your current payroll software can accommodate the additional reporting requirements.
  • Discuss with employees any changes to the frequency of payments that may arise.
  • Ensure that records are maintained of the days for which the remote working allowance is paid.
  It is important to remember that from 1 Janaury 2024, for all employers who make payments which fall under the categories outlined above, two returns will be required following each payroll run: the current and standard Payroll Submission Report and the Enhanced Report Requirements submission for any expenses paid.   If you require any further information in relation to the above or would like to consider an outsourced payroll service, please do not hesitate to contact us at info@robertsnathan.com.
November 15, 2023

Budget 2024 – Expert Analysis

Minister Michael McGrath announced his first budget as Minister for Finance yesterday Tuesday 10th  October with Pascal Donohoe making the step over to Public Expenditure on this occasion. It was a budget speech full of references to “cost of living”, “planning for the future” and the “housing crisis”. A total budget package of €14bn was announced but the immediate question arising from the speech was have the measures gone far enough to meet those areas of concern with the rising cost of living for individuals and the rising cost of running a business for business owners? We will look at the highlights from those key areas of reference below.   Cost of living €12bn has been provided to deal with the cost of living measures.   Some of the key areas of tax saving for individuals to increase their take-home pay include:
  • Raising the standard rate of income tax threshold by €2,000 to €42,000. This will save earners on €42,000 or more €400 per year in income tax.
  • Increasing most tax credits by €100 which in a lot of cases will see earners benefit by €200 per year.
  • Increasing rent tax credit to €750 from €500.
  • Amendments to the USC which will see the 4.5% rate reducing to 4% and increasing the 2% rate band by €2,840. This could save a person earning €70k per annum €406.
  Overall this could see an individual renting and earning over €70,000 having an increase in their annual tax home pay in 2024 of €1,256 per annum. However, broken down this results in €100 per month extra in that individual's wage. There was also the negative news that PRSI will raise by 0.1% from October 2024 which would see that individual earning €70k paying €70 extra per annum in PRSI.   The increase of the minimum wage to €12.70 will be welcome news for low-paid workers but it will cause additional strain on SMEs to meet increasing wage demands.   Other cost-of living measures to put more disposal funds in people's bank account include:  
  • The 9% VAT rate on gas and electricity to be extended by 12 months to end of October 2024.
  • €450 of energy bill credits to be provided over 3 instalments between end of 2023 and April 2024.
  • A €300 lump sum payment for fuel allowance recipients and a €200 lump sum for Living Alone Allowance recipients in November.
  • A Christmas bonus paid in early December and a cost of living double week in January will be paid to social welcome recipients.
  • A €12 weekly increase in social welfare payments.
  A large headline number of €12bn does not seem to correlate to a large increase in a middle-income earners take-home pay. The lump sum energy credits will certainly be welcome to homes over the next six months but it is felt more could have been done to perhaps overhaul USC.   Planning for the future The Minister continued the theme of planning for the future through his speech with many of the announcements in relation to corporation tax feeling very much like planning for the future as many will not take immediate effect and relate to reviews being carried out on reliefs and schemes. Below is some of the highlights of these items.  
  • The work on a participation exemption for foreign dividends will be examined and will not be introduced until next year's finance bill.
  • A review of interest deductibility was a welcome announcement but we would hope this will be acted on in future for an area that has many complexities for corporates and advisors.
  • A TALC subgroup will be formed to review business supports with the view to simplifying.
  • A public consultation on VAT modernisation will take place.
  • A public consultation will be launched in relation to share-based remuneration.
  • A promise from the Minister to review Entrepreneur Relief to improve the incentive for founders.
  In addition to this two new funds were announced in the Budget speech: the Future Ireland Fund and an Infrastructure, Climate and Nature Fund. The Future Ireland Fund is designed to protect public services while the latter is designed to invest in climate and nature-related projects.   These are all important issues and it is great to see them being highlighted but more immediate simplification of reliefs and further support for our SMEs would have been of more benefit.   To continue to show our dedication to global tax reform the introduction of the 15% corporation tax for in scope entities will be within this year's Finance Bill. However, in an effort to perhaps ease the effective tax rate increase for some of our important corporates the R&D tax credit will rise from 25% to 30% from 2024. This R&D change will be welcome news for SMEs who benefit greatly from the cash flow of this relief and the first year max payment has been increased from €25,000 to €50,000.   In addition to the R&D changes there was also more good news for the future of domestic SMEs and entrepreneurs in relation to the below key items:  
  • Confirmation that amendments would be made to the Employment Investment Incentive Scheme to increase the limits an investor can invest to €500,000 for a 4-year holding. It was noted that the EIIS would be reviewed going forward to simplify what is a very onerous piece of legislation at present.
  • The prior amendments to the Key Employee Engagement Programme which sees it extended to end of 2025, doubling the limit of shares within the KEEP scheme to €6m and allowing CGT treatment on buy back of shares from an employee have now received EU State aid approval and can be implemented.
  • A new capital gains tax relief for angel investors in innovative start-ups. Investment must be for 3 years and at least €10,000 for 5%-49% share in the entity by acquiring newly issued shares. The relief will allow a CGT rate of 16% (18% if through a partnership) on gains up to twice the value of the initial investment with a lifetime limit on qualifying gains of €3m.
  • From 1 January 2025 the age category for retirement relief of 55-65 will be extended to 55-70. Therefore, a tax free consideration of €750k will be available until 70 and reducing to €500k after 70. For a transfer to a child there was previously no limit to 65 and a €3m limit after 65 but now there is a €10m limit introduced until 70 and the €3m applies after that.
  • Extension of accelerated capital allowances for energy efficient equipment to 31 December 2025.
  • The tapering of the tax-free element for BIK purposes on electric cars was postponed with the €35,000 threshold remaining until the end of 2025 and the €10,000 additional deduction has been extended by one year to the end of 2024. This is a welcome move to encourage the use of electric vehicles as company cars with the first €45,000 being disregarded from the OMV for BIK purposes for 2024.
  The above incentives are good news for our SMEs, but they will wait anxiously to see if any action comes from the various reviews and public consultations noted above.   Housing Crisis Opposition called it a Budget for landlords rather than tenants. This was in reference to the new relief for landlords on rental income which would see €3,000 of rental income be disregarded for 2024 at the standard rate meaning a saving of €600 for a landlord in income tax. This will increase to €4,000 in 2025 and €5,000 for 2026 and 2027. However, this may not be a generous enough measure to encourage landlords to free up property given the top rate of income tax remains at 52%. The Minister highlighted that 86% of landlords own one or two properties and it is important to encourage this large majority to keep those properties available to the rental market. The Vacant Homes Tax has been increased to 5 times the LPT from 3 from 1 November 2024.   There were some positions for people attempting to secure their first home with the news that the Help to buy scheme will be extended by 12 months to end of 2025 and a new mortgage interest relief for one year in 2023 which could provide a tax credit up to €1,250 and is based on the increase in a taxpayer’s interest between 2022 and 2023. It is only available to taxpayers with outstanding mortgages on their primary residence of between €80,000 and €500,000 at 31 December 2022.   Overall, it is not certain if enough has been done to encourage landlords to put properties up for rent and a more beneficial scheme for landlords with one or two rental properties may be required.   Agriculture The agricultural industry felt disappointed that their budget was cut from prior year and that there was not more support for the rising costs being endured by farmers from both an inflation and environmental policy changes perspective. It would appear major planning for the future with rural Ireland is needed to ensure green policies being pursued do not negatively affect an industry that is the backbone of our nation. To add to the disappointment for farmers the flat rate addition will decrease from 5% to 4.8% from 2024. There is also now a 7-year holding requirement on land before it can avail of leasing farmland relief. There were some reliefs extended as per below highlights:  
  • Consanguinity relief was extended a further 5 years to 31 December 2028 which allows a 1% stamp duty rate to apply to transfers within a family.
  • Accelerated capital allowances for farm safety equipment extended by 3 years to 31 December 2026.
  • Lifetime relief limits from stock relief, stamp duty relief and succession farm partnerships to €100,000 from €70,000.
  • Stock relief increased from €15,000 to €20,000.
  The agriculture sector will be disappointed with the lack of support but there was also a lack of focus on other industries such as tourism and hospitality.   We would hope that the budget will help people with the cost of living crisis as appears to be the main intention of this budget but we would also hope and urge that the future planning commitments and various reviews would be actioned in the near future and not drift down the priority list.
October 11, 2023

Budget 2024 – What to Expect

Tomorrow, Tuesday 10th October, the Minister for Finance and the Minister for Public Expenditure will announce Budget 2024. With local Council and European elections next summer and a general election most likely during 2025, it is likely the Budget will follow recent trends of aiming to please a large percentage of the electorate while perhaps not doing a significant amount for any one particular area. There is expected to be a big focus on the cost of living crisis while also being cautious of an over-dependence on corporation tax receipts which may be volatile in the future. In this regard and from information coming from government comments it seems that the following will be likely part of the announcement:  
  • A small increase in the standard rate band by €1,000 - €1,500.
  • A small change in USC perhaps by 0.5% or increasing the threshold at which low-income earners enter the USC scale.
  • An increase in social welfare payments and double payments on Christmas week.
  • Another energy credit regime similar to 2023 which could see two or three credits of c.€100 provided against energy bills.
  • For young families there will be assistance through cuts to childcare costs and free schoolbooks for secondary school children.
  • For renters it is likely the rent credit will be increased from €500.
  As practitioners dealing with clients on a daily basis in relation to their tax affairs, there are certain changes we would really welcome in the Budget. We have set some areas we feel would be beneficial to the overall economy and address the concerns of clients we talk to.   Housing There has been some talk of a benefit being provided to landlords who enter into a long-term lease with a tenant. This would be very welcome and could have a real positive impact on the rental market. We continuously have enquiries from property owners in relation to their tax position if renting a premises. Unfortunately, for those with a salary/income from another source, it often means their tax bands and credits are already being used and the rental profit suffers income tax at 52%. It is not encouraging for landlords to enter long-term leases with tenants when they are only netting less than half of the rental profit.   Energy costs As mentioned above, there has been mention of another energy credit being announced in this year's Budget which would see household owners obtaining perhaps a couple of €100 or €150 credits against their energy bills. It is important to note that the reduced VAT rate of 9% which applies to gas and electricity is due to expire at the end of October 2023. An extension of this VAT rate could be another good way to help domestic and commercial energy costs and would certainly be encouraged. We would hope to hear the Minister provide for such an extension tomorrow.   Share Schemes It has been an area of focus recently by Revenue to carry out compliance reviews of employees who received share awards/share options. This has led to many employees who may never have filed income tax returns realising their compliance requirements on share awards/options. This can be a complicated and confusing area for employees and although the KEEP scheme sought to provide a beneficial share scheme from a tax perspective it appears to have failed in practice due to the onerous nature of the rules. It would be sensible to look at perhaps a complete overhaul of the KEEP scheme or introduce a user-friendly share award/option programme for employers to reward and encourage key staff members.   Capital taxes An area of concern for clients considering succession planning or entrepreneurs trying to drive a business to succeed is often potential changes in capital taxes. A commitment to ensuring the main capital tax reliefs of entrepreneur relief to encourage entrepreneurs; business asset relief to ensure safe succession of a business within the family and retirement relief would be useful to avoid worry of such reliefs being potentially taken away at short notice in future. We would also suggest a reduction of CGT and CAT from 33% could be encouraging to see properties, businesses and other assets changing hands.   We await tomorrow’s announcement with interest and we would be delighted to see a real focus on looking after our domestic SMEs and our entrepreneurs to encourage them to keep employment at such a record high. We feel the above suggestions would be good ways to reflect this.
October 9, 2023

The Register of Beneficial owners (RBO)

New procedure for the registered entities to access their own data On 22 November 2022, the Court of Justice of the European Union (CJEU) published a decision affecting European member states national beneficial ownership registers. This judgment by the Court, sitting as the Grand Chamber in Luxembourg, has held that, in the light of the Charter, the provision of the anti-money-laundering directive whereby Member States must ensure that the information on the beneficial ownership of corporate and other legal entities incorporated within their territory is accessible in all cases to any member of the general public is invalid. Anti Money Laundering Directives In accordance with anti-money laundering directives across Europe, member states were obliged to create an online register to detail the beneficial owners of companies registered in each member state.  In Ireland, this was created by the CRO establishing the Central Register of Beneficial owners of companies and Industrial and provident societies (CBRO).  www.rbo.gov.ie. This online register enabled anyone to have public access to specific details on the beneficial owner of an entity by paying a small access fee online. However, this accessibility was recently challenged by a Luxembourg-registered company and its beneficial owner, with a judgement, decided at the end of November 2022. In summary, therefore, the ECJ believes that while maintaining registers of Ultimate Beneficial Owners is vital in the fight against money laundering and terrorism financing, it is not proportionate that the general public should have completely unfettered access to entity ownership information. Irish Register Accordingly, the Irish register has now been closed to the general public, and only ‘designated persons‘ can access who must apply by filing an online request form BEN3A1. The term ‘designated person’ is outlined in Section 25 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, and includes financial institutions, accountants, auditors, tax advisers, legal professionals, property service providers, virtual currency service providers and dealers in expensive goods such as houses, cars, jewellery, artworks, etc. Also, under Section 33 of the 2010 Act, ‘designated persons’ are obliged to conduct customer due diligence tests on customers “prior to the establishment of a business relationship with a customer”, “prior to carrying out an occasional transaction with, for or on behalf of a customer” or “carrying out any service for the customer….…” While public access is suspended, this does not take the obligation to register away from beneficial owners.  Companies are still obliged to create and maintain their internal registers of beneficial owners and to communicate any changes to the CRBO.  For new companies, this must be completed within five months of incorporation. If a relevant entity does not file with the RBO, it may be guilty of an offence and be liable on summary conviction to a Class A fine of up to €5,000 and on conviction on indictment to a fine of up to €500,000. Final Word Just because public access has been restricted, this has not changed the requirements for companies to maintain their registers and communicate any changes to the CRBO. Designated persons will need to register to still access this information as part of their onboarding / know-your-client requirement as required by law. Contact Us We have previously assisted many companies in completing their registration requirements to establish their new Irish company.  Contact us to discuss the impacts of any of these changes to your company structures or your filing requirements here in Ireland. Please contact a team member to discuss further.
February 22, 2023

Company car drivers face benefit-in-kind increases.

As people get back in their cars after the pandemic to carry out face to face business development, many employers are back considering whether to lease or buy cars for staff. When an employer provides a vehicle to their employee and this vehicle is available for private use, they may be chargeable to tax on the benefit in kind (BIK) arising. The employee will be subject to tax on the cash equivalent value of the vehicle. There are a number of changes being imposed from 2023 in relation to vehicles provided to employees. The changes are largely driven by the government’s Climate Action Plan 2021 to lower emissions by 2030. From 2023 onwards, the BIK cash equivalent on the use of an employer provided car will be determined based on both the business mileage undertaken and the vehicle’s CO2 emissions, as outlined below. i. The amount of business mileage and CO2 emission category
Lower Limit Upper Limit A B C D E
Kilometres Kilometres % % % % %
-- 26,000 22.5 26.25 30 33.75 37.5
26,001 39,000 18 21 24 27 30
39,001 52,000 13.5 15.75 18 20.25 22.5
52,001 -- 9 10.5 12 13.5 15
  ii. The CO2 emissions category of the car is as per the following table
Vehicle Category CO2 Emissions (CO2 g/km)
A 0g/km up to and including 59g/km
B More than 59g/km up to and including 99g/km
C More than 99g/km up to and including 139g/km
D More than 139g/km up to and including 179g/km
E More than 179g/km
  Example: A Car in category B is made available to an employee and they use the car for both personal and business use. The Original Market Value (OMV) of the car is €40,000. The business mileage was 40,000km. The cash equivalent would be €40,000 x 15.75% = €6,300. Electric Vehicles Prior to 2023, an electric vehicle made available to an employee did not incur a BIK charge if the OMV was less than €50,000. For vehicles with an OMV greater than €50,000, the balance of the OMV was multiplied by 30% to get the cash equivalent value. However, for an electric vehicle made available for an employee’s private use during the years 2023 – 2025, the cash equivalent will be calculated based on the actual OMV of the vehicle reduced by:
  • €35,000 in respect of vehicles made available in the 2023 year of assessment;
  • €20,000 in respect of vehicles made available in the 2024 year of assessment; and
  • €10,000 in respect of vehicles made available in the 2025 year of assessment.
Any portion of OMV remaining, after the reduction is applied, is chargeable to BIK at the prescribed rates as outlined above. Example: A Car in category A is made available to an employee during 2023 and they use the car for both personal and business use. The OMV of the car is €80,000. The business mileage was 26,000km. The cash equivalent would be €80,000 - €35,000 x 22.5% = €10,135. If the employee travels over 52,001 the cash equivalent would be €80,000 - €35,000 x 9% = €4,050. Therefore, the more business mileage undertaken, the less BIK that will arise. Company Vans For the year of assessment 2023 and onwards the cash equivalent for vans will increase from 5% to 8% of the OMV.
December 12, 2022