When PAYE Modernisation was first announced by the Minister for Finance in the October 2016 Budget Statement, it seemed a long way off. But now that it is about to come into operation, every employer, agent and payroll provider needs to check that they are ready for the new system and understand its implications.
PAYE Modernisation represents a move to Real Time Reporting. From 1 January 2019, all employers will be required to accurately report employee remuneration and PAYE data on a real time basis. Employers must notify Revenue at the same time as, or in advance of, any payment to employees.
Some employers will need to change current payroll practices to comply with the new system. In particular, practices around estimation, shadow payrolls and end of year corrections will need to change.
Employers will need to review payroll procedures so that accurate information is provided to Revenue on a timely basis. This is more difficult then it may seem, particularly regarding BIK details, share-based compensation and employee expenses. Employers should:
− Ensure their data is complete, accurate and up to date
− Engage with payroll software or payroll service provider
− Have a current tax credit certificate for each employee
− Issue a P45 to anyone who no longer works for them
− Check that they have allocated an Employment ID to each employee
− Know each employee’s date of birth
− Advise employees of the payroll changes
− Encourage employees to register for and use Revenue’s myAccount service and review – and if necessary – update their tax credits.
If employers make mistakes or do not comply with the new rules, a €4,000 fixed penalty can be imposed. Where PAYE is not withheld correctly, Revenue will recoup the tax on a grossed up basis.
Under real time reporting, Revenue will be able to monitor each employers’ adherence to the rules. Where there are significant and or recurring errors in the information provided to Revenue, this is most likely to lead to Revenue interventions and penalties.
It’s not just employers who need to prepare. Agents assisting clients with PAYE Modernisation will need to:
− Review their current terms of engagement
− Prepare for an increased workload
− Clarify exactly what their role will be (eg. are they processing the PAYE returns or advising on same?)
− Review fee quotes
− Consider GDPR implications
− Ensure clients supply accurate information in a timely manner to enable the filing of returns.
This is the biggest change to the PAYE system in 60 years and hiccups are likely to arise. There were lots of problems in the UK when it introduced a similar system in 2014; hopefully Ireland can learn from that experience.
Revenue have indicated that they will support those who do their best to be compliant. However, the penalty regime is too harsh and need to be revised. In the UK the penalty for errors is £100, compared with €4,000 here. If there are a number of errors (no matter how small) a penalty of €4,000 per error can be applied.
Employers need to ensure that payroll information is accurate (including BIK, expenses etc.) and produced on a timely basis to enable compliance with PAYE real time returns. They should also prepare for closer monitoring of PAYE data by the Revenue, which is likely to lead to more Revenue interventions.
We are happy to help. Please post your comment below or contact Gerry Higgins, Tax Partner on 01 677 9000 or by email: email@example.com.
Cooney Carey are delighted to announce that we have successfully trained 250 ACA/ACCA students to date.
At Cooney Carey we take great pride in our trainees becoming well rounded qualified accountants. We provide a positive and supportive work environment where all our trainees can develop at their own pace.
Hear from two of our 2019 graduate recruits Niamh Heaney and Sophie Fitzgerald.
Since joining Cooney Carey, my knowledge and understanding has increased. This is due not only to the diversified range of tasks given to me for a wide variety of clients, but also due to the regular training sessions, to the mentorship and most importantly the strong supportive team environment from senior partners to fellow juniors.
The good working environment within Cooney Carey is a testament to the in-house belief in a positive work/life balance. For example, we have all heard stories of long working hours, this is an exception rather than a norm here in Cooney Carey, which has been brilliant for me as a Mum. Niamh Heaney
My experience as a trainee with Cooney Carey has been brilliant. I have worked on various clients from a broad sector which has provided me with great knowledge and experience which will stand to me throughout my career. Working with Cooney Carey I have continuous training both in-house and external CPD, this has given me the necessary skills to feel confident in my position.
Cooney Carey is a great place to work as it allows for a perfect work/life balance, during the summer we can work up hours to get a half day Friday allowing us to start the weekend early! It also has a great social side, by organising team building activities, social events and being involved in numerous charitable events. The team at Cooney Carey are the most helpful people I have come across and have made my experience memorable and valuable. Sophie Fitzgerald
To check out more about opportunities with us see our website www.cooneycarey.ie/careers/
On Friday of last week (18th), Cooney Carey held our strategic away day, where we discussed plans and opportunities in the upcoming 12 months. As a multi-disciplinary professional services firm, we had input from 12 members of our senior management team. It was an extremely productive day and many discussion points arose throughout the day.
Afterwards, I reflected on the day and specifically the importance of holding a successful meeting. I estimate that in a normal working week, I attend an average of 10 – 15 meetings a week (client and internal meets), which when I think about, over 30+ years of experience is upwards of 15,000 meetings.
Each person has different strengths and qualities in their professional armoury but when it comes to holding a successful meeting, there are a few fundamentals that have stood me in good stead down through my advisory career. This list is not an exhaustive, but merely a list of the take-away points that have resonated with me over the course of my career to date:
I hope these tips will help you make the most of the meetings you hold and attend.