Revenue Incentive to regularise PAYE on misclassification of Employment Status by 30 January 2026

January 15, 2026

Further to the Supreme Court judgement in Revenue v Karshan (Midlands) Ltd t/a Domino’s Pizza and the publication of detailed Revenue guidance, Revenue is now providing a disclosure opportunity to employers to correct payroll issues for 2024 and 2025.  In their announcement on 11 September 2025, Revenue invites employers who, acting in good faith by relying on case law and guidance prior to the Supreme Court judgement, misclassified workers as self-employed during 2024 and 2025, to regularise their payroll tax affairs by submitting a disclosure.  The process allows for regularisation of income tax, USC and PRSI liabilities without penalties or interest.
 
Where the disclosure is made under this settlement arrangement, Revenue will treat any adjustment of liability in respect of 2024 and 2025 as a “technical adjustment” under the Code of Practice for Compliance Interventions. In this regard, no tax-geared penalty or fixed penalty will arise, and Revenue will not consider the liabilities to have arisen from either deliberate or careless behaviour.
 
The settlement arrangement is only available for classification errors made in good faith and it does not apply in the following circumstances:

• The individual should have been classified as an employee under the Code of Practice on Determining Employment Status in effect prior to October 2023 or based on any published decision or determination of the Department of Social Protection, Workplace Relations Commission, Tax Appeal Commission or a Court.
• Matters relating to any intervention which was open prior to 20 October 2023
• Situations where Revenue is of the opinion that the misclassification has arisen from either careless or deliberate behaviour.

To avail of the settlement terms, the disclosure must be submitted together with payment to Revenue on or before Friday30 January 2026. Employers can also request to enter a Phased Payment Arrangement (“PPA”). Such a request must be made at the time the disclosure is submitted, and interest will apply over the repayment period.

This summary is intended as a general guide and has been prepared based on existing Revenue guidance and tax legislation. No action should be taken without obtaining professional taxation advice.   If you need any assistance, please do not hesitate to contact Purcell McQuillan Tax Partners Ltd on 01 668 2700 or email your usual PMQ contact.

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