Revenue Guide - Small Benefit Exemption - a few sneaky bits

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WizardDr

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Revenue have issued a guide to the Small Benefit Exemption

- must be by gift card as in not cash or able to draw cash using the card
- only two can be issued in year
- maximum total €1,000
- no paye/prsi/usc
- sneaky bit you cannot issue a value card for say €500 AND tax it and then issue a further card(s) for €1,000 - the lot is disallowed (who thought this nonsense up?)
- from 1/1/2024 must be reported
- must be reported as part of enhanced reporting (i.e. when it is paid along with a number of others e.g T&S)

 
It is sneaker than that:

Example 8
Employer A provides easter eggs every year in April to all of its employees. Employer A also provides three €50 vouchers in January, June and November each year to all of its employees.

Employer A must determine before it provides any small benefit to its employees whether that ‘payment’ is a taxable payment, where income tax, USC and PRSI are applicable and it is reported through payroll.

If Employer A is satisfied that the benefit meets the conditions for the small benefit exemption, it must be reported in an ERR submission, with the date of payment and the value of the payment reported. One of the conditions of the small benefit are that it is the first and second provision of such a gift, with a maximum value of no greater than €1,000 that are to be deemed the small benefit and subject to the exemption.

In this instance the provision of the voucher in January and the easter egg in April will constitute small benefits for which the conditions for tax exempt treatment will apply. As with the other examples the voucher in January must be reported on or before it is provided to the employee and the value of the easter egg must be reported on or before it is provided to the employee in April.

Therefore, these benefits must be reported through ERR. The vouchers in June and November are taxable, as they are the third and fourth incentives given in the year and must be taxed in the normal way through the PAYE system.

 
That explains why we were all asked recently whether we had received any vouchers this year… we got one last December. Nothing since for all staff, although perhaps some teams got them for rewards for goals.

we assumed vouchers for flu jabs don’t count

we’ve since been told that the traditional Christmas lunch treat is not being funded. We were blaming the comp for being tight but maybe they are just watching their tax position
 
If you get vouchers for more than a couple of years, they can be assumed to be part of your employment contract. Once this happens they are no longer tax exempt.
 
Do many employers give their employees vouchers on a regular basis? I've never heard of that happening. Companies that avail of the small benefit exemption know exactly what the rules of the exemption are and haven't had to amend the amount of gifts they give their employees as it's usually once a year.
 
I think in general Revenue are getting a little to tight in some places.
I have heard from a few people that the Christmas party is ok but if you have a lunch during the year for someone leaving or a milestone event even cake in the office they Revenue are starting to see these as BIK events. But the idea that if I get an Easter Egg that count as one of two small gifts in the year and in theory the value of the egg and your voucher at Christmas must be less then the 1000 is madness. It is not like firms are giving top of the range eggs. Any egg i have gotten is likely from the 3 for €5 or 2 for €10 range.
The other item and it is mentioned above what if you give a voucher for employee of the month that needs to be tracked and if someone wins it 3 times in the same year the 3rd voucher is taxable if even the total is only €75 between the 3.
 
Oh dear. Such a palaver for what small tax take they will get! I think employers will just cut out all these little extras if it gets so painful to report. We often get small hampers, easter eggs etc and it's a nice touch but I'm hardly getting rich from it!!
 
misemoi said:
Oh dear. Such a palaver for what small tax take they will get! I think employers will just cut out all these little extras if it gets so painful to report. We often get small hampers, easter eggs etc and it's a nice touch but I'm hardly getting rich from it!!
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I've heard it's Revenue cracking down on things they don't get. Mustn't be any Easter eggs provided by the Revenue to their staff...
 
Philip S said:
I think in general Revenue are getting a little to tight in some places.
I have heard from a few people that the Christmas party is ok but if you have a lunch during the year for someone leaving or a milestone event even cake in the office they Revenue are starting to see these as BIK events. But the idea that if I get an Easter Egg that count as one of two small gifts in the year and in theory the value of the egg and your voucher at Christmas must be less then the 1000 is madness. It is not like firms are giving top of the range eggs. Any egg i have gotten is likely from the 3 for €5 or 2 for €10 range.
The other item and it is mentioned above what if you give a voucher for employee of the month that needs to be tracked and if someone wins it 3 times in the same year the 3rd voucher is taxable if even the total is only €75 between the 3.
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Cake in the office? What next, you have to declare free coffee/sandwiches at a training event? I understand an xmas party with a night in a hotel or whatever could count but a cake for the office from the boss for a birthday?
 
They have issued the extra guidance because of ERR due to come in Jan 2024

I'm on bi- weekly meetings with the revenue as we speak regarding ERR

The briefing was updated because employers were operating the small benefit scheme incorrectly and also there was confusion as to what is taxable and tax free

And yes, the err is phase 1 of 4 that is coming in terms of reportable benefits
 
This sounds like it is going to be impossible. We get a €200 gift voucher each December, but we also do an end of year party with raffle prizes like an iPad or a bottle of bubbly. And then we take the department out to lunch now and then, so that make it horrible for someone in finance to track all of this and put it through Mary’s payroll if the limit is exceeded, but not Johns as he won no prize.
 
The bottom line here is that a new generation is running Revenue now, things are going to be done their way from now on and to hell with everyone else from the employers and staff directly affected to the weak Finance Ministers who are supposed to be exercising oversight over them and the laws they write for a legislature that is increasingly incapable of doing its own job.

For another example of this, see this genuinely pathetic situation in which a hapless and law abiding property owner finds themselves.
 
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T McGibney said:
The bottom line here is that a new generation is running Revenue now, things are going to be done their way from now on and to hell with everyone else from the employers and staff directly affected to the weak Finance Ministers who are supposed to be exercising oversight over them and the laws they write for a legislature that is increasingly incapable of doing its own job.

For another example of this, see this genuinely pathetic situation in which a hapless and law abiding property owner finds themselves.
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Yeah, revenue have always had room to make their own interpretations of the tax legislation and to apply it as they see fit. They seem to be changing some of those interpretations.
 
Does anyone know the position where a person has two employers?

Can they receive a qualifying voucher from each employer for €500 each tax free?

If they receive two vouchers from one employer to the value of, say €800, and they prohibited from getting one from the second employer for €200 tax free?

It's a very real situation, but I cannot find any mention of it on revenue.ie.
 
callybags said:
Does anyone know the position where a person has two employers?

Can they receive a qualifying voucher from each employer for €500 each tax free?

If they receive two vouchers from one employer to the value of, say €800, and they prohibited from getting one from the second employer for €200 tax free?

It's a very real situation, but I cannot find any mention of it on revenue.ie.
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For somethings the limit is per employer others are per 'Revenue customer'.
The vouchers (small gift) are per employer.
 
That was my thinking.

I may check directly with revenue so as not to get recipients in trouble.
 
callybags said:
That was my thinking.

I may check directly with revenue so as not to get recipients in trouble.
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Good luck in getting a clear reply.

It is rule 163 and 164 here: https://revenue-ie.github.io/paye-e...ules/Enhanced Reporting Validation Rules.xlsx

Rule 163: Does not state at what level the 1,000 euro limit is recorded at.
The Business Rule: Small Benefit value can not exceed 1000 (value may change in future)
Technical Validation Description: Value of Benefit can not exceed €1000

Rule 164: Conflicting number of Small Benefits (Gifts) - Twice per PPSN or 2 per Employee.
The Business Rule: Small Benefit can not be entered more than twice for PPSN in one tax year
Technical Validation Description: Exemption can not exceed 2 per employee per tax year
 
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