The new administrative arrangements for PAYE (PAYE Modernisation) commenced on 1 January 2019 and Revenue has advised me that 167,000 employers, including many smaller employers, are successfully reporting pay and deductions details in respect of 2.7m employees via the new format.
PAYE Modernisation represents the most significant change to the PAYE system since its introduction more than fifty years ago. At the heart of the programme is the new real-time reporting requirement (to Revenue) for employers in respect of employee income and statutory deductions, including income tax, PRSI, USC and Local Property Tax, which must be completed with each payroll run. It is important to note that there is no change to the actual payment dates and as such no cashflow implications for employers.
PAYE Modernisation has streamlined the reporting process for employers by eliminating the need to complete the various forms and returns that were required under the old system (e.g. P30, P45, P46, P35, P60) and making it a by-product that is seamlessly generated with each payroll run. Crucially, it provides Revenue with the most up to date pay and deductions details for employees in real-time, which greatly helps in ensuring that taxpayers benefit fully from their various credits and entitlements. Also, for the first time, employees can view the information reported to Revenue on their behalf by employers.
I am aware that during the two-year design stage of PAYE Modernisation, Revenue worked extensively with all relevant stakeholders in a co-design approach to ensure the new arrangements provide optimum benefit for all to the greatest extent possible. This included employers, representative bodies such as the Irish Business and Employers Confederation (IBEC), the Small Firms’ Association (SFA) and the Irish SME Association (ISME) as well as the payroll industry. Revenue has confirmed to me that working relationships built up during that time are still operating very effectively and are used to solve any issues that arise as the new arrangements settle down.
Arising from the co-design approach, Revenue now provides two main options through which employers can submit payroll details. The first involves a direct connection from a business’ payroll system to Revenue while the second allows employers input payroll details directly via Revenue’s Online Service (ROS). The second option is particularly aimed at smaller employers who may not use electronic payroll solutions. A paper option is also available where an employer is not e-enabled. Revenue also provides very extensive information for employers on its website at www.revenue.ie/en/employing-people/paye-modernisation/index.aspx and provides a dedicated Employers Helpline at 01-7383638.
Overall, I am very satisfied with the extensive efforts Revenue has made to communicate with and assist employers during both the design and implementation phases of PAYE Modernisation and I congratulate it for delivering such a significant project within a relatively short period of time. Finally, if the Deputy is aware of any specific employers that require assistance with the new reporting requirements, he should advise them to contact Revenue at telephone number 01-6474094 for assistance.