Revenue has issued an important guidance for employers following the Supreme Court’s decision in Revenue v Karshan (Midlands) Ltd t/a Domino’s Pizza. This provides a unique opportunity for employers to correct payroll tax issues for 2024 and 2025.
What does this mean for employers?
If you have engaged workers on a self-employed basis, you should review their status using Revenue’s updated five-step framework for employment classification in Tax and Duty Manual 05-01-30).
Revenue recognises that some employers may have faced genuine challenges in updating payroll systems after the Supreme Court judgment in October 2023.
A limited-time disclosure opportunity is now available: Employers who identify bona fide misclassification errors for 2024 or 2025 can make a voluntary disclosure to Revenue, settling liabilities to Income Tax, USC, and PRSI without penalty or interest—provided the disclosure is made by 30 January 2026.
This opportunity is only available where the misclassification was not careless or deliberate and does not apply to cases already under intervention before 20 October 2023.
What to do:
Employers should review workforce arrangements and consider whether a disclosure is required.
If you are unsure about your obligations or how this Karshan decision affects your business, now is the time to sort it out.
If you have any concerns or need to discuss your position, please get in touch with your accountant or Tax Adviser to assist you with these changes and ensure compliance.
MF 06/10/25.
