Irish Revenue recently issued a new Tax & Duty Manual introducing a time-limited disclosure opportunity for employers to rectify cases where workers were misclassified as self-employed in 2024 or 2025.

This settlement opportunity is being provided by Revenue following the Supreme Court judgment in Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino’s Pizza, which introduced a new five-step decision making framework to determine a worker’s employment status.

Why this matters

The Karshan case introduced a significant shift in the legal interpretation of employment status and whether workers should be classified as an employee or a self-employed contractor.

Employers who genuinely relied on prior guidance or case law in effect before the Karshan ruling and thus in good faith treated employees as contractors should carefully consider availing of Revenue’s one-off settlement arrangement.

This would involve disclosing details of payments made to workers who historically have been treated as independent contractors and paying any 2024 and 2025 PAYE, USC and PRSI underpayments relating to those individuals.

If the disclosure is accepted by Revenue, employers will pay no penalties or interest and avoid what could otherwise be steep financial consequences if the status of the workers were successfully challenged by the Revenue in the future.

Where an employer meets the eligibility requirements but elects not to disclose on any employee misclassification, they lose out on...

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