Issue |
Pre-2022 concession |
2022 position |
|---|---|---|
Company car benefit-in-kind (BIK) |
The percentage used to calculate the cash equivalent of the vehicle could be based on the actual business kilometres for January 2020. |
This concession expired on 28 February 2022. Car BIK must be calculated on the actual business mileage undertaken from this date. |
Transborder Workers Relief |
Individuals were permitted to work from their homes in Ireland, provided all other conditions associated with the relief were satisfied. |
This concession expired with effect from 31 March 2022. After this date, all conditions for the relief must be satisfied (including performing the duties outside Ireland). |
Temporary employer-provided accommodation |
Revenue allowed such accommodation to be provided on a tax-exempt basis. |
Concession will continue for 2022, but is curtailed to a maximum continuous period of no more than three weeks. |
COVID-19 testing kits and flu vaccine |
Could be provided on a tax-exempt basis. |
Tax exemption will continue throughout 2022. |
Reimbursement of taxi fares for transporting employees to/from work |
Exemption existed where an employer met the taxi costs for an employee to or from home and the workplace due to health concerns related to COVID-19. |
This concession remains in place, but will be subject to a further review before 30 June 2022. |
Extension of tax return filing deadline—restricted stock units |
Revenue extended the 2019 and 2020 income tax filing deadline for employees who received real-time foreign tax credits provided through payroll to the standard income tax filing deadline of 31 October (instead of 31 March). |
This concession has been extended to the 2021 tax year, with a tax return filing deadline of 31 October 2022. |
Reimbursement in respect of personal flights/return to the State |
In 2020, Revenue allowed a concession on the tax treatment of reimbursements by an employer to an employee regarding holiday and flight cancellations where the employee was required to remain in/return to Ireland to deal with COVID-19-related issues. This concession expired on 31 December 2020. |
This concession has expired. |
1. Car BIK
As the COVID-19 concession has been removed, employers must communicate to their personnel that reduced BIK rates can now only be based on the actual recorded business mileage from 1 March 2022. Where an employee provides an estimate for the remainder of the year, employers must ensure that regular reviews and validations occur. Equally, the position must be communicated to the payroll function to ensure that significant BIK adjustments do not arise throughout the year.
2. E-working allowance
Given the new norm of employers seeking to support staff in working from home, employers may wish to consider the applicability of the tax-free payment of the €3.20 daily e-working allowance to employees who continue to work from home. At the beginning of the pandemic, Revenue confirmed that this allowance could be paid to employees where Government advice recommended that employees work from home. Given the rise of new and hybrid ways of working, many employers are considering implementing a formal 'working from home' policy, which clearly identifies matters such as the individual's normal place of work, health and safety considerations for both the employer and employee (including an appropriate home workspace), and requirements to travel.
3. Cross-border remote workers
Employers should ensure that they have oversight of where their employees are located. Given the expiry of many COVID-19 concessionary measures in Ireland and other jurisdictions, it is likely that any employees carrying out their duties in other jurisdictions may create potential payroll withholding tax—and possible corporate tax—obligations for the business in these jurisdictions. Indeed, many organisations are considering implementing policies that permit personnel to work from an overseas territory for a limited period of time. While such policies can be positive from a workforce perspective, they may lead to significant tax consequences and must be carefully considered prior to implementation.
4. Self-correction process
Employers must be aware of the significant changes in the self-review and Revenue audit landscape following Revenue's introduction of the new Revenue Compliance Intervention Framework. One significant development includes a change to current practice regarding the self-correction of payrolls. Under the updated Compliance Intervention Framework, which came into effect on 1 May 2022, any payroll self-corrections made by employers must now be formally communicated to Revenue in writing, outlining how the issue has arisen. It must also provide the calculation of the taxes now due and the interest applicable. For further insight into the new Compliance Intervention Framework, read our Tax Risk and Controversy team's analysis.
5. Share Scheme Reporting—Revenue focus
The due date for filing Share Scheme returns was 31 March 2022. Revenue is placing an increased focus on cross-checking employer returns and income tax returns submitted by employees, particularly with regard to gains on share options exercises. Revenue has written to certain employers to confirm that it will contact their employees regarding their personal income tax obligations in the context of share options transactions disclosed on the Form RSS1. Accordingly, many employers are taking a fresh look at their employee communications to ensure that the existing material is clear and accessible to all share plan participants. Revenue is also cross-checking the Form ESA against the data processed through the employer's payroll and any anomalies or inconsistencies that are identified are being probed. Accordingly, it is very important that:
- all share submissions are made in a timely manner on, or in advance of, the filing deadline (31 March following the tax year-end)
- the submission is accurate and correct in order to mitigate against further Revenue enquiry
Employers who have not yet submitted their 2021 share returns, particularly Forms RSS1 and ESA, should do so without delay.
We are here to help you
If your organisation is grappling with one or more of the issues outlined above, or has an employment tax query, contact us today.
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