With major changes to the Revenue’s payroll reporting imminent, the Irish Tax Institute, the SFA and the Institute of Directors have published a guide to help employers to get ready.
The Revenue’s new, real-time system known as ‘PAYE Modernisation’ will go live on 1 January 2019 and even though the first deadline in the process is just eight days away, only one in four employers in the country have taken the required first step.
Employers are asked to get their employee records in order by 31 October so that their systems can go live in January, but just over 45,000 employers have uploaded these records to the Revenue’s system.
• Download Guide To PAYE Modernisation
Tax Institute president Marie Bradley said: “Employers must be accurate in their reporting to avoid the imposition of penalties when mistakes are made. A penalty of €4,000 can apply to each instance where an employer fails to follow the instructions in Revenue’s new Payroll Notification system.
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“This instruction enables the employer to calculate the tax correctly. Similarly, a €4,000 penalty can apply if an employer does not keep a register of employees at their business address. Our guide shows it’s not just important to be ready to use the technology but to have your employer records ready by 31 October.
“PAYE modernisation has implications for every aspect of the payroll process. It is vital that all employers review their payroll systems, to be confident that they can submit accurate reports to Revenue every pay date.”
Accurate Reports
SFA director Sven Spollen-Behrens added: “Small firms need to review their payroll processes to ensure all forms of pay can be identified and reported on a real-time basis. Pay is much broader than salary — for example, it includes share-based pay, a company car, medical insurance paid for employees and other similar items. Accurate reports of mobile employees who are travelling in and out of Ireland will also be necessary, so that any PAYE due is deducted and reported at the right time.
“Small businesses that do not use payroll software or an outsourced provider will be able to submit their reports to Revenue via ROS. However, this reporting facility won’t calculate the tax due. If they choose to use this option they need to be confident that their payroll calculations are correct.”
IoD chief executive Maura Quinn commented: “Directors of all companies will need to ensure company payroll processes and controls are sufficiently robust to satisfy the requirements of the new regime. Larger organisations with complex payrolls may need to implement a coordinated approach across multiple business units, for example, finance, HR, payroll, IT, business operations and their third-party service providers. This should minimise the risk of errors and potential tax exposures.”
The Revenue Commissioners expect that the new system will boost tax receipts by up to €50m in 2019, as real time reporting leads to greater compliance.
