Revenue has released an information leaflet titled “PAYE Modernisation – Are You Ready?”. This kick-starts their awareness campaign for businesses to get ready for payroll changes called PAYE Modernisation or Real Time Reporting (RTR). Revenue outlines the steps that all employers need to take in order to ensure that their current records and obligations are up-to-date and correct.
PAYE Modernisation will change how employers report payroll information for their employees to Revenue. A file will need to be submitted (electronically) to Revenue, containing all details of employee payments. The contents are similar to the annual P35, however, this file will be submitted every pay period (weekly, monthly, fortnightly, etc.).
If you are an employer who uses payroll software, then the work involved to comply with PAYE Modernisation will be minimal. However, for smaller employers who do not use payroll software, the process of complying with PAYE Modernisation will be time-consuming and stressful. Currently, these employers make one manual submission to Revenue through their annual P35. With PAYE Modernisation, these employers will be required to make an employer submission to Revenue each pay period in real time. The employer submission will contain details comparable to what currently appears on an employer’s P35 return.
With PAYE Modernisation in mind, Revenue has contacted nearly 400 employers regarding their P35L returns for 2016. These returns contained employees who were never previously registered as working with the employer. This communication reminds those employers of their obligation to comply with PAYE regulations and requests those employers to submit a P46 for the non linked employees currently in their employment, the commencement date should be input as 1st January 2017 for employees that commenced employment before the current tax year. This action will then result in a new P2C (tax credit certificate) being issued for these employees.