Employer Solutions

Employer Tax Updates: What you need to know

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Revenue on the tax treatment of health benefits, and the updates to the civil service mileage rates, which we have set out below in more detail.
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The Employment Wage Subsidy Scheme (EWSS) self-review 30 September deadline is fast approaching.

In addition, if you are an employer operating share based remuneration schemes, you are asked by Revenue to provide certain details to your employees.

Read on to learn more.

Updated Civil Service Mileage & Subsistence Rates

Civil Service mileage rates have increased (in all categories except one) and the new rates are effective from 1 September 2022.  Journeys accumulated between 1 January 2022 and 31 August 2022 will not be altered; actual kilometres to date will count towards the total for the year.

The payment of Civil Service mileage rates applies where employees use their own private vehicles for qualifying business journeys.  An employer may reimburse an employee at a rate up to these limits for such qualifying business journeys.

The updated mileage rates effective from 1 September 2022

Milage Rates 1st September.png

 

Rates in force up to 31 August 2022

 

Milage Rates 31st Aug.png

 

Mileage claims made for qualifying business journeys carried out in electric vehicles apply the rates included in the engine capacity band 1,201cc – 1,500cc.

For those employees who cycle, they can claim 8 cents a km for business trips on their bicycle. This rate has not changed.

There is also an increase in the subsistence rates for qualifying overnight allowances with effect from 1 September 2022.  The below rates are available for employees who are at least 100km from home and their normal place of work:

Rate Category Table.png

The vouched cost of accommodation rate (known as the VA rate) for Dublin only has increased from €147 to €167 plus €39.08 for meals (no change in meal rate). 

There has been no change to the daily subsistence rates which remain at:

  • €39.08 for absences of 10 hours or more; and
  • €16.29 for between 5 and 10 hours .

Health and well-being related benefits

Revenue guidance on the health and well-being measures introduced in Finance Act 2021 tells us that a benefit-in-kind (BIK) exemption may apply where an employer incurs an expense in providing certain benefits to their employees, such as;

  • Fees relating to a qualifying medical check-up such as doctors’ and consultants’ fees;
  • Access to healthcare, for example maintenance or treatment in a hospital;
  • Treatment prescribed by a practitioner such as physiotherapy or orthoptic services;
  • Covid-19 testing; and
  • Flu vaccines.

A condition of the BIK exemption is that it is made available to all employees generally.  An employer may incur the cost directly or reimburse a portion or the full amount of health expenses incurred provided the expenses are vouched and all other conditions have been met. 

Employment Wage Subsidy Scheme (EWSS) self-review deadline

Employers who availed of the EWSS should ensure that they complete their eligibility self-review and, where invalid claims were made, correct payroll records and consider repayment options before 30 September 2022.

Read our insight on the EWSS self-review.

Share Option Schemes employer notice

Revenue wrote to certain employers requesting that they circulate information regarding employees’ tax reporting and filing obligations.

According to Revenue’s records, employees may not be fully aware of their tax reporting and filing obligations where share options are exercised, assigned, released and/or there was a disposal of shares. 

Revenue ask that the following is shared with employees:

  • When a charge to income tax may arise for the employee and when the tax payment should be made to Revenue,
  • Confirmation that an RTSO1 Form should be completed when making the relevant income tax payment,
  • A reminder that an individual is considered a ‘chargeable person’ in the year in which they exercise, assign and/or release a share option, thus must complete a Form 11 personal tax return for that year,
  • The possible requirement to pay and report Capital Gains Tax (CGT) where the employee disposes of their shares post exercising, and
  • How to report and pay income tax arising on dividend payments attaching to the shares.

 

It is the responsibility of the taxpayer (the employee) to comply with their tax and reporting obligations in these circumstances. However, payroll reporting by the employer may be required for other types of share based remuneration schemes such as Restricted Stock Units (RSUs) or share awards.  It is important therefore to fully understand the Irish tax payment and reporting requirements for the type of share scheme in place.

Next steps

Contact your Grant Thornton tax adviser to discuss how these latest updates impact you and your business