What is PAYE Modernisation?
PAYE Modernisation is a project that means employers will have to report payroll information to Revenue in “real-time” i.e. each time they pay their employees. These reports will have to be filed using Revenue compliant payroll software and means, for example, that those paying their employees weekly will have to file weekly reports with Revenue using this software.
The new rules will not affect when you pay across payroll taxes to Revenue – just when you need to report them. Payment deadlines will remain the same for employers.
What businesses are affected by this change?
Any business which is registered with the Revenue Commissioners as being an employer whether you have 1 employee or 100!
Why is it being introduced?
The current PAYE reporting system was introduced almost 60 years ago and is not seen as being fit for purpose in today’s working environment. The new regime should result in greater reporting accuracy and will also be able to cater to wider variety of payroll arrangements.
There will also be greater transparency for employees as they will be able to log in and check after each pay run what their employer has reported in terms of gross pay and taxes deducted.
Another benefit for employees will be that the Department of Social Protection will have a real time view of what PRSI contributions have been made for an employee which should speed up any applications for payments from the department.
When will PAYE Modernisation begin to affect my business?
Whilst the date for the introduction of this new regime is 01 January 2019, all employers need to be acting now to make sure they are compliant with the new rules once they are introduced.
Some of the main steps you need to take are as follows:
- Make sure you are registered as an employer with Revenue if necessary
- Confirm that you have the correct PPS number for all your employees
- Make sure all your employees are registered with you
- Complete Form P45 for all employees who have left their employment with you
- Start talking to your accountant about the move to Real Time Reporting
Most importantly Revenue have requested that each employer will have to file a return which has a detailed listing of each employee on their books including names, pps no’s and all other relevant information.
What happens if I get it wrong?
A penalty of €4,000 per breach of the rules can apply, for example:
- If you do not apply the most up to date tax credits for your employees
- If you do not inform Revenue when an employee has ceased employment.
- If you do not hold a Register of Employees at your business address.
What are the key dates to remember?
ASAP – Submit your “List of Employees to Revenue”
Up to 31 December 2018 – Keep your list of employees up to date and ensure that your payroll processes are compliant with PAYE Modernisation for 01 January 2019
01 January 2019 – New regime of Real Time Reporting goes live
5th of every month – A summary statement of payroll reports from the previous month will be available on ROS for review.
14th of every month – deadline for employers to check the summary reports and correct any errors
Help with PAYE Modernisation
At TaxAssist Accountants we can assist you with any preparation that needs to be undertaken prior to the introduction of Real Time Reporting including uploading your list of employees, reviewing your current payroll system and its likely compatibility with the new regime. We also provide outsourced payroll services to thousands of clients across the country so why not arrange a free initial consultation today to see what we can do for you.