PAYE Modernisation is coming to Ireland in 2019, how will payroll change?

As an employer in Ireland, you may have received a letter from the Revenue Commissioners recently that they are making changes to the PAYE system from next January.

The Revenue are making this change to try to ensure that at all times, they have the most up to date information on an employee’s tax status so that correct tax credits and cut offs can be issued.

This new system will mean that the Revenue will receive payroll information in real time. Effectively this means that an electronic return must be submitted to the Revenue as part of every pay run, whether weekly, fortnightly or monthly. It will also result in the various P forms (P30, P45, P46, P35 and P60’s etc) being abolished from the 1st January 2019.

The electronic return, which will be prepared automatically by your payroll operator as part of the payroll, must be submitted “on or before” the payroll date. This will impose a greater obligation on employers to ensure that the information submitted in every payroll run is as correct and as complete as possible.

Then each month, the Revenue will issue a statement for the month showing the total payroll deductions submitted and the amount due will then be payable by the due date. It is expected that the due date will be same as it is currently for you (23rd of the month following the month/quarter).

Corrections can still be facilitated under the new system, but they may have adverse consequences. For example, a correction might give rise to interest or penalties in the event it results in additional PAYE being due by you. In the past corrections could be handled by adjusting the annual P35 but from 2019 this will not be possible.

All in all, I believe the new PAYE system should operate more smoothly with the Revenue than the present one, but really only time will tell.

Any questions on the above, feel free to contact me.

Timothy Kelliher

Chartered Accountant