Understanding Advance Travel and Subsistence Payments and ERR
One of the categories that fall under Enhanced reporting Requirements is Travel and Subsistence. In April, a new administrative practice was introduced for advance payments for travel and subsistence expenses.
·3 min read
Enhanced Reporting Requirements (ERR) was first introduced in January this year. This new requirement means that employers have been required to report details to Revenue of certain non-taxable payments made to employees. One of the categories that fall under ERR is Travel and Subsistence. In April, a new administrative practice was introduced for advance payments for travel and subsistence expenses.
What are advance payments under ERR?
Advance payments are funds given to employees or directors before they incur travel or subsistence expenses. These payments are subject to tax when they are paid out and, therefore, do not fall under the scope of ERR.
However, if the employer wishes to avail of the section 114 administrative practice (i.e., not tax the travel and subsistence expenses) this can be done, once certain conditions are fulfilled. This then means that the travel and subsistence expenses would now be subject to ERR.
Submitting an advance payment claim under ERR
When the payment is made, the advance travel or subsistence payment should be reported under ERR using the new subcategory “Advance Payment of Travel and Subsistence.” After incurring travel or subsistence expenses, the employee must submit a claim to their employer. Employers must then update their ERR submissions to reflect the accurate amounts.
Conditions for using the administrative practice for advance travel and subsistence payments
To benefit from the optional administrative practice for advance travel and subsistence payments, employers must meet specific conditions. Here’s an overview:
1. Appropriate controls: Employers need to have systems in place to track and reconcile all advance payments made for travel and subsistence.
2. Reporting under ERR: When an advance payment is made, it must be reported to Revenue under the subcategory, “Advance Payment of Travel and Subsistence.”
3. Reasonable estimates: The advance payment should be a reasonable estimate of the expected expense claim that qualifies for relief under section 114 TCA 1997.
4. Timely claims: Employees must submit their actual travel or subsistence cost claims promptly, and employers must then update their ERR submissions accordingly.
5. Handling excess payments: Any excess amount paid should be recouped quickly. If not, it should be taxed.
6. Software solutions: Once the necessary software is available, employers must start reporting to Revenue under this practice.
Do I now need to report all advance travel and subsistence payments under ERR?
Employers are not obligated to adopt this practice. If they opt-out, the standard rules apply: advance payments are fully taxable through payroll, and there’s no requirement to report these payments under ERR. The Revenue ROS online/file upload and API are now available in the ERR system for advance travel and subsistence payments. Bright’s payroll solutions, BrightPay, Thesaurus Payroll Manager and Surf Payroll, as well as our system for expense reporting, BrightExpenses, now have the functionality to report advance travel and subsistence payments programmed into the software.
Check out Revenue’s Tax and Duty manual for more information on ERR and advance payments. You can also register for our upcoming ERR webinar with Revenue, where you can have your ERR questions answered live by a Revenue representative.
This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.
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