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Revenue guidance on Karshan judgment soon

Revenue’s chair has said that the tax authority will publish guidance on the impact of the Karshan judgment “in the coming weeks”.

Niall Cody (pictured) was speaking as Revenue published its annual report for 2023, which shows that it collected a total of €127.9 billion last year – including €26.3 billion in non-exchequer receipts collected on behalf of other Government departments and agencies.

In the Karshan case, the Supreme Court upheld a Revenue appeal, and found that drivers working for Karshan (Midlands) Ltd, trading as Domino’s Pizza, were employees, rather than independent contractors, for taxation purposes.

Clarity

Commenting today (25 April), the Revenue chair welcomed what he described as the “important” judgment delivered by the Supreme Court in this case and signalled that there would be “an increased focus” on compliance in this area.

“Although the judgment did not change the law in relation to the classification of employment, it provided significant clarity on the key factors to be considered when classifying an individual’s employment status for income-tax purposes,” Cody stated.

He added that Revenue had been working with the Department of Social Protection and Workplace Relations Commission to update the Code of Practice on Determining Employment Status, and separately on the development of its own guidelines on the impact of the judgment.

“We have encouraged businesses that engage workers on a self-employed basis, and their agents, to review the arrangements they have in place, and we will work with those businesses who, having regard to the impact of the judgement, wish to voluntarily regularise their position,” Cody stated.

Debt deadline

Revenue officials also urged business to “act now” and engage with it on the Debt Warehouse Scheme, ahead of a key deadline of 1 May.

Its figures show that, on 23 April, €1.58 billion was owed by 53,172 customers under the scheme. Around 70% of firms with debt in the warehouse owe amounts less than €5,000, with 4,800 businesses accounting for €1.35 billion of the total.

“It is important to note that businesses do not have to pay all of their warehoused debt by 1 May 2024,” said Joe Howley (Collector General).

“However, where a business fails to meaningfully engage with us to agree a plan for payment of the debt by this date, the balance outstanding will immediately be subject to standard debt-collection proceedings and will no longer benefit from the 0% interest rate applicable to warehoused debt,” he warned.