Revenue Crackdown Clock Ticking with Three Weeks for Employers to Settle PAYE Issues for Misclassified Contractors

Press Release

Revenue Crackdown Clock Ticking with Three Weeks for Employers to Settle PAYE Issues for Misclassified Contractors

13 Jan 2026

9th January 2026 – Grant Thornton has warned that employers have just three weeks remaining to take advantage of Revenue’s PAYE Settlement Arrangement for workers who were incorrectly treated as self-employed rather than employees in the 2024 and 2025 tax years following a Supreme Court judgement in late 2023.

The arrangement, which closes on 30 January 2026, allows employers to regularise historic PAYE, USC and PRSI obligations for individuals who were paid off-payroll but should have been taxed on-payroll, without triggering a full Revenue audit or prolonged compliance intervention.

Michelle Dunne, Employment Tax Director at Grant Thornton Ireland, said the deadline is fast approaching and employers should act now:

“Employers who have engaged contractors, consultants or other off-payroll workers during 2024 and 2025 need to urgently reassess whether those individuals were correctly classified for tax purposes. The question of contractor vs employee for tax purposes affects all businesses engaging individuals for services, not just pizza delivery drivers as the original Supreme Court judgment in 2023 related to.

“So organisations that have engaged the services of individuals who they deemed freelance or gig workers, like  consultants or labourers, need to carefully consider whether they have a potential PAYE liability and if they should now avail of the Revenue settlement opportunity.

“Revenue has been very clear that this settlement opportunity is time-limited. Once the 30 January deadline passes, employers who have not regularised their position may face a significantly higher tax exposure, including interest, penalties and the risk of formal audit.”

Revenue scrutiny of employment status has intensified in recent years across a range of sectors including professional services, construction, technology, media, logistics and the gig economy. Where individuals were essentially working under the control and direction of the business, Revenue may determine that PAYE should have applied, regardless of contractual labels.

Under the settlement arrangement, employers can disclose historic misclassifications for 2024 and 2025 and settle liabilities on an agreed basis, bringing certainty and closure.

“For many businesses, this is an opportunity to draw a line under legacy issues and move forward with confidence. However, the process does require careful analysis. Employers must identify affected individuals, quantify liabilities correctly and ensure future working arrangements are structured and documented appropriately.”