Are you ready for PAYE Modernisation?
With PAYE Modernisation due to commence on 1st January 2019 have you taken the necessary to make sure you’re ready?
To prepare for PAYE modernisation, there are two things you need to do:
- Ensure that you are following the correct PAYE processes and procedures.
- Submit a list of employees to Revenue.
Revenue is asking employers to send a List of Employees through Revenue’s Online Service (ROS). This list will ensure that both employers and your records are accurate and up to date. The closing date for sending the list of employees is 31 October 2018.
The list must include:
- employees who are currently in your employment (including directors)
- employees on long term leave such as maternity leave or sick leave
- pensioners in receipt of payments from you
- seasonal or temporary employees for whom you have not completed a P45
- employees on a career break for whom you have not issued a P45
- employees for whom you have received PAYE Exclusion Order.
- You should not include employees who are currently on a career break and have been issued with a P45.
It is important that you ensure the accuracy of your list of employees before submitting it to the Revenue. Fix erroneous information such as addresses and PPS numbers. Remove employees no longer with you and add any employees you have who are not listed.
Can you apply a do-nothing approach?
Revenue are effectively allowing employers an opportunity to update their list of employees prior to PAYE modernisation. Doing nothing is not an option. An employer who fails to fulfil any of the obligations under PAYE Regulations shall be liable to a penalty of €4,000 for each breach (and where that employer is a company, the secretary of that company is liable to a separate penalty of €3,000 in respect of each such failure).
What happens if I operate a Net Pay Agreement with employees?
What do we mean by net pay agreements? – That is telling an employee that you will pay them a certain amount “into their hand” without having any idea what their tax credits or cut-off points are. This can end up costing you the employer a lot of money and will be even worst under PAYE Modernisation. Your employees will have access to their own details on MyAccount on ROS. It is going to be easier than ever for them to transfer some of their tax credits or cut-off point over to their spouse. The only person that will lose out here is the employer. Get into the practice of setting a gross rate per hour with employees. If you have any staff currently still on a net pay rate, get in contact with us to rectify this prior to the new pay period.
What about casual labour?
According to the Revenue, there is no such thing as “casual labour”. Even if someone works for you for one day only and they are not self-employed, they are an employee and need to be registered as an employee on ROS before you can pay them.
If you have any queries about how PAYE Modernisation will affect your business, drop us an email.