2022 Corporation Tax filings and R&D claim
Finance Act 2022 brought about a number of key changes in relation to the R&D tax credit (RDTC) regime.
This measure is intended to be the start of a phased introduction of additional reporting for employers in respect of the provision of other benefits or payments to employees and directors which have not been subject to tax by the employer through the payroll system.
The legislative provision for this is contained in section 897C TCA 1997. Revenue has confirmed that the Minister for Finance signed the commencement order on 13 December to implement the ERR from 1 January 2024.
This is not a welcome development as it will create an extra burden on employers, as the reporting must be done in real-time.
The reporting will work as follows:
Where an employer makes a payment under one or more of the categories below, they will be required to report details of these payments to Revenue on or before the date of payment via the ROS system, which will be similar to that used currently for payroll reporting.
Under phase 1, the details to be reported will be as follows:
Travel and subsistence
The amounts and dates of payment for each of the following:
Small benefits falling under the Small Benefit Exemption
The values and dates of payment of vouchers or other tangible non-cash benefit (maximum two benefits in a tax year, cumulative value cannot exceed €1,000). It is the first two qualifying benefits that are exempt.
Remote working daily allowance
The number of days, amounts paid and dates of payment of this allowance.
Other points to note are:
According to Revenue, the Enhanced Reporting Requirement will:
The Revenue is drafting regulations in relation to ERR. We understand that the regulations will include the provision of fixed penalties in respect of ERR. However, we also understand that Revenue may adopt a ‘service for compliance’ approach until 30 June 2024. This approach will involve supporting employers who are attempting to comply with their reporting obligations. During this period, we understand that Revenue will not operate any compliance programmes in relation to the ERR and it will not seek to apply any penalties for non-compliance.
The ERR will have a significant impact on employers from 1 January 2024, therefore, we set out below some actions for employers to consider taking between now and then to get ready for this change:
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars employment tax team below:
Name | Position | Telephone | |
Ken Killoran | Tax Partner | 01 449 4451 | |
Mark Spelman | Senior Tax Manager | 01 449 6457 |
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