On the 1st of January 2019, Ireland’s PAYE system will undergo the biggest shift since its inception. From that date, all employers in Ireland will be required to submit pay and deduction data to the Revenue in real time, whenever employees are paid, instead of filling out returns at the end of the year. This is known as PAYE Modernisation. Every business in Ireland needs to be prepared for these upcoming changes.
Why real time reporting?
For the Revenue, the benefits of switching to PAYE Modernisation are significant. They will receive accurate, up-to-date tax and payment information throughout the year, leading to more efficient processes, particularly when it comes to compliance and timely interventions.
While employers will no doubt face some initial disruption when moving systems, the medium and long term benefits include:
- Less paperwork - P30, P35, P45 and P60 forms will be no more. Instead, all the information within them will be managed via the real-time system.
- Time savings, once the new system is fully implemented.
- Improved accuracy.
How will data be submitted?
Real time information will be sent to the Revenue in one of two ways:
- Direct payroll reporting. Your payroll software may integrate directly with the Revenue Online System to exchange the relevant information.
- Revenue Online System payroll reporting. Export files from your payroll software and upload them through the Revenue Online System.
If you don’t use payroll software, you can use forms within the Revenue Online System to submit the information manually.
The information you report will include pay, deductions, pay date, and start/end date information (where applicable).
What do I need to do to prepare?
The first thing you need to do is ensure all your current paperwork is in order. That means checking all your employees are registered with Revenue, and that you have an up to date tax credit certificate (P2C) for every employee. All employee information should be correct and current, including their PPSNs.
You’ll need to send an up-to-date list of employees to Revenue through their online system. Double check that it doesn’t contain any employees who’ve already been sent P45s. This functionality will become available to employees throughout 2018 - you’ll be notified when it’s available to your business, but please don’t do anything without talking to Integrity Software first. The format of this file is very important and must be submitted in a particular way. If you submit a file without consultation with Integrity, it could cause problems from January 2019 when you attempt to do payroll submissions.
What will change from the 1st of January?
Tax credit certificates will be replaced by Revenue Payroll Notifications. You’ll need to request up-to-date RPNs from Revenue before paying employees.
You’ll need to report payment information to the Revenue whenever you run payroll (whether it’s weekly or monthly), through one of the methods mentioned above. Even if you outsource payroll, you need to ensure that the information you give your provider is accurate, consistent, and meets the new requirements.
At the end of every month, the Revenue will send you a statement detailing your payroll submissions. You can accept this statement, or make changes if it’s not accurate, and then pay Revenue accordingly. You’ll then need to pay up - check the Revenue website for due date details.
For more information about PAYE modernisation and Integrity Software, speak to your account manager.