PAYE Modernisation 2019

The modernised system of PAYE withholding took effect from 1 January 2019. In summary, the new system places a requirement on employers to report their employees’ pay and PAYE deductions to Revenue on or before the payment, thus placing more onerous payroll reporting requirements on employers.

A comprehensive summary of the new system can be found HERE

Compliance with new system

The new system will provide greater visibility to Revenue on the operation by the PAYE system by employers, with the likelihood of more regular “compliance interventions” which should lead to a greater annual yield of PAYE (Revenue estimate an annual figure of €50m).

By now, most employers will have submitted at least one Revenue payroll submission and will be becoming familiar with the new system. It is, however, important for employers to review the operation of the PAYE system from the beginning of the year in accordance with the new requirements and identify any problem areas which may include:

  • whether they have correct PPSNs for all employees and they are correctly registered with Revenue
  • the timeliness and accuracy of employee benefit and expense information that was used to draft the payroll submissions in January or February
  • whether the PAYE liability on employee benefits, expenses and share-based remuneration is being calculated correctly
  • the presence in Ireland of globally mobile employees during the period and if PAYE withholdings are required, whether all remuneration data is available to allow for the calculation of PAYE.

To assist employers with the implementation of the new system, Revenue has issued guidance on the following areas:

  • Benefits-in-kind and notional pay
  • Share-based remuneration
  • Shadow payrolls
  • Expenses
  • Payments to directors

While the first quarter of 2019 has been particularly pressurised as the launch of the new system coincides with the preparation of the 2018 P35, Revenue is actively monitoring payroll submissions and will make direct contact with employers who do not appear to be operating the system correctly.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars employment tax team below:

Staff Member

Position

Email

Telephone

Frank Greene

Tax Partner

fgreene@mazars.ie

01 449 6415

Ken Killoran

Tax Director

kkilloran@mazars.ie

01 449 4451

John Kelly

Tax Senior Manager

John.kelly@mazars.ie

01 449 4495

February 2019

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FEBRUARY 2019 TAX NEWSLETTER

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February 2019 Tax Newsletter

This series of articles will provide you with an update on tax developments that impact organisations in Ireland and those that do business with Ireland.