Dáil Éireann Debate, Tuesday - 15 January 2019
211. Deputy Michael McGrath asked the Minister for Finance the estimated number of income tax units on emergency tax; the corresponding data for the same period in 2018; the impact of PAYE modernisation on the numbers; and if he will make a statement on the matter. [1113/19]
View answerI am advised by Revenue that emergency tax should only apply in limited circumstances under PAYE Modernisation. These circumstances typically occur where an employee has not provided a valid Personal Public Service Number (PPSN) to an employer or where it is an employee’s first employment in the State. Also, in very rare circumstances emergency tax could apply because an employee’s tax record needs to be updated, which could prevent Revenue from issuing a ‘Revenue Payroll Notification’ (RPN). The RPN is the mechanism through which Revenue provides employers with real-time information in respect of employees’ tax credit and rate band entitlements.
Revenue has confirmed that by 11 January 2019, employers had successfully submitted pay and statutory deduction details in respect of over 1.54m employees under the new PAYE Modernisation arrangements. Of these, approximately 23,000 (1.5%) individuals were reported as being on emergency tax. It is not possible to directly compare this figure with the 2018 tax year because employers were not previously required to provide information on instances where emergency tax was applied.
Revenue has further advised me that from analysis of the submissions received to date, it is clear that some employers are unnecessarily operating emergency tax in respect of employees where an RPN is available. However, the analysis also confirms that many employers who incorrectly operated emergency tax in their first payroll run of the year have since corrected the error and applied the correct details to their employees’ second week’s earnings and refunded any overpayments.
Revenue has assured me that it will continue to very actively monitor PAYE Modernisation payroll submissions and will make direct contact with employers who appear not to be operating the system properly to assist them rectifying any errors made. Revenue also expects that the numbers of employees being placed on emergency tax will decrease further once the system beds down and employers become used to operating on a real-time basis.
Finally, I wish to commend Revenue for the successful launch of PAYE Modernisation and the seamless integration of the new real-time reporting arrangements into employers’ payroll systems.
