Employers – you need to act now on PAYE Modernisation!
The biggest changes to PAYE since its introduction in 1960 is fast approaching. From 1st January 2019 employers are obliged to submit their payroll information to Revenue in “real time”. This means that an electronic return must be submitted to Revenue as part of each and every pay run. The impact is not just restricted to the actual reporting of payroll information, it also imposes obligations on you as employers to be efficient, transparent and accurate in the payroll information that is processed and reported. And, importantly employees will be able to view each payroll submission in relation to themselves through their Revenue “MyAccount” – so employees get to see their own payroll records real time as well.
Currently most payroll calculations and amendments are not processed on a real time basis: some are monthly, quarterly, bi-annual, or at the year end. PAYE Modernisation removes these options from employers as they will have to report and declare the payroll in line with “payment dates” i.e. weekly, bi-weekly or monthly depending on your pay periods. Each submission is in effect a signed declaration of a true and accurate reflection of the payroll.
These changes are mandatory and, whilst there may be a little latitude with employers at the start, Revenue will penalise employers for non-compliance. Where an employer fails to operate PAYE – i.e. comply in the submission of returns, statement, notification or certificate, or to remit taxes due to Collector General, they shall be liable to a penalty of €4,000. Interest on late payments will continue to be charged. Failure to correctly calculate the PAYE on payments or benefits could result in the employer being liable for the tax that should have been paid – Revenue can also gross-up this payment leading to even more substantial liabilities.
And, with real time information Revenue will be able to use their internal risk management systems to more closely monitor compliance and identify risks. Undoubtedly, for those employers not complying there will be much higher risk of a targeted Revenue Aspect Query or Audit, and all the associated costs that they entail.
The first deadline for employers is fast approaching. Employers must submit up-to-date and accurate payroll information on all current employees to Revenue in file format via ROS. Revenue will compare their records to your list and highlight any discrepancies needing attention.
Failure to upload this list on or before the 31st October 2018 deadline runs the risk of any discrepancies not being resolved by 1st January 2019, resulting in a high possibility of employees suffering harsh emergency tax in their January payroll and all the additional hassle that will entail.
If you need help with any aspect of implementing Payroll Modernisation, or want to explore the possibility of outsourcing your payroll processing, please contact our dedicated Payroll Service Department on 0749321420 or email email@example.com for information on how we can help.