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PAYE Modernisation – Part 2

Getting Ready to Face 2019 Head On

Following on from last week’s focus on Revenue’s end of year notice, today we will focus on some of the other main points raised in the notice which may be of benefit to you and your business in the new year of change ahead. Here at EcovisDCA, we want to ensure that our clients and friends head in to 2019 with the right mind-set and have their most successful year.

Statements:

As we have already discussed, Revenue are abolishing a number of their regular forms including the P30 and P35. Instead of these forms, Revenue will issue a monthly statement on your payroll submissions. This statement will include a summary of total liability as well as a breakdown of liability.

It is important to note that the monthly statement will be accepted as your return if no amendments are made by the return due date which will be the 14th of the following month.

Employees:

Beginning January 1st 2019, commencing and ceasing employees will become part of the normal payroll process. We discussed RPNs in last week’s post, and these must be requested for any new employees before payment is issued to them. This action creates the employment in Revenue records and is the only action you need take on this.

USC (Universal Social Charge) and Emergency Tax:

It was announced in Budget 2019 that there will be changes to USC and Emergency Tax, the information on the Revenue online system has been updated with these details.For employees who are exempt from USC, their exemption will be noted on their RPN. If circumstances change, the employee may need to contact Revenue to have a new RPN created.

Further Information:

Revenue are constantly updating their guide to PAYE Modernisation for 2019 on their website so be sure to stay informed. Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE Modernisation – Part 1

Everything Changes and Stays the Same

It’s getting to that special time of year again, when everything starts to wind down (or ramp up for those in retail businesses of course), the evenings get darker and darker and the early birds begin putting up twinkling lights much to the chagrin of the late starters. It is also that time of year when thoughts begin to turn inwards and you may be reminiscing about the year 2018 and whether it has been a successful or turbulent year for your business. It is important at this time of year, to take time to focus on the year ahead and make plans for the future. As such, Revenue have released an end of year notice for employers, and we thought this would be the perfect time to take you through the main points. This week we will focus on the first half of the notice, with next week’s post detailing the second half.

2018 Employer Tax Credit Certificates:

Revenue have stated in their brief that they would cease issuing 2018 P2Cs as of November 30th, with the exception only of those employees commencing employment notifying Revenue in December, these will continue to be issued until the end of the year.

PAYE Modernisation:

This will come as no surprise to our regular readers as we have focused quite heavily on this of late, but this long discussed and well overdue change will be introduced on January 1st 2019. The old PAYE system will be changed to a real time system. In advance of this it is imperative that you ensure all employees are registered with Revenue, and that all of your employment and payroll data is correct and up to date. This will ensure a smoother transition into the new system.

It is also advised that if you currently utilise payroll software, to contact your provider to ensure that you are set up for the new system.

Similarly, if you use the services of an accountant for your payroll, it is advised to contact them and ensure that all is in order for the changes ahead.

ROS Digital Certificates:

As we have previously discussed, all Revenue operations will be moving to the online system, it is crucial that you should review your digital certificates and ensure that they have not expired to avoid any delays to your services as these certs must be renewed every 2 years. Ensure that your contact details are up to date so you do not miss any important reminders.

P2Cs:

As discussed above, Revenue will be discontinuing the practise of issuing these, instead you will utilise your payroll software or input Revenue Payroll Notifications (RPNs) onto the ROS system yourself. This system will provide you with all information required to process taxes etc. and will be available from December 5th.

Forms:

As we have discussed previously in relation to PAYE modernisation, forms such as the P45, P46, P30, P35 and P60 are to be abolished in favour of real time reporting.

Further information on how to prepare for the coming year is available on the Revenue website. Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE System Change

A Change is as Good as a Rest

We recently spoke briefly about the changes to our PAYE (Pay as you Earn) system here in Ireland, aptly called ‘PAYE Modernisation’ which will come into effect on January 1st 2019. Today we would like to go into a bit more depth on the topic and ensure that all of our colleagues, clients and friends are aware of what these changes will mean for them as well as to ensure that all are prepared for this fast-approaching change.

The PAYE system in Ireland is long overdue a significant update, and these changes are set to be of benefit to both employers and employees.

Employers:

For employers, these changes will be of benefit as they will seek to streamline the way in which employers report payroll information to Revenue. Files will be submitted electronically for each employee for every payment period. It is hoped that the employers workload will not be increased with this change, and it is anticipated that these reports will be fully integrated into payroll software, allowing for a smoother transition for employers.

Employers will also be able to input the details of a new employee before their employment has begun, which it is hoped will reduce the frequency of issues arising with over or under payment of tax.

Employees:

Perhaps the most prevalent change that will be in place for employees is that the P60, P30, P35 and P45 will be entirely abolished. Instead, employees will have full access to their pay and tax record online. It is anticipated that this will be updated consistently as the employee is paid, and will allow Revenue to conduct reviews to figure out if employees are utilising their tax credits to the maximum effect. This will also allow employees to adjust their tax credit and Standard Rate Cut off Point digitally, and they may be prompted to do so if Revenue identify that they are not being used to the full effect. This will create an easier system for the employee as they will no longer be required to wait until the end of the tax year to assess over or under payment.

As with all important changes, we would advise to do your research, fully read the Revenue Brief “PAYE Modernisation, Are you Ready” and ensure that your company and employees are fully registered and that all the required forms are issued at year end. This will ensure that you start the year off on the most secure footing possible ahead of these changes.

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Corporation Tax Statement of Particulars – Section 882 TCA 1997

Allow us to be Brief

Here at EcovisDCA it is always our top priority to ensure that our clients and friends are kept fully up to date on any and all issues that could be pertinent to the continued success of their thriving businesses. Today we will be focusing on a new update issued from Revenue which may have an effect on the registration status of some companies. On October 11th 2018, Revenue released a brief entitled “Corporation Tax Statement of Particulars – Section 882 TCA 1997”. The title isn’t exactly snappy or self-explanatory so we thought we would break down the details for you so that you can be fully informed.

As you are all aware, it is essential for all companies to register with the CRO (Companies Registration Office) this should be done immediately upon commencing trade operations. However, there are two other times that registration must take place which may be overlooked:

  • When a pertinent or material change in company details has occurred.
  • When issued with a notice to do so from a Revenue Inspector.

Therefore, it can be just as important to keep an accurate record of your business status with Revenue as it is to take that initial registration step. As these two conditions can sometimes be missed, issues have arisen which have required Revenue to issue notices. These notices concern companies who registered in 2017 but have yet to register their trading status with Revenue. It is essential that a reply is issued to this notice should you receive one, in order to provide an accurate update of your company’s status.

Should your company have begun trading, a tax registration will be required, as well as a notification of commencement. Details can be found on the Revenue website of what else may be required should trading have commenced.

Revenue also require a reply within 30 days detailing the company’s status in the event of any of the following:

  • The Company does not intend to trade.
  • The Company has not yet commenced trading but intends to do so.
  • The Company is non-resident by virtue of a Double Taxation Agreement.

This can all be done using the Revenue online services, which have vastly improved the usability and user-friendly status of dealing with these matters. As always, should you have any concerns or queries on any business or financial matters, please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

VAT Increases for the Hospitality Sector

Room with a View?

As discussed in last week’s Budget post, Budget 2019 snuck up almost unannounced and whilst it did not seem like much of a big news day for many, there were some who were hit by an utterly unexpected blow that could have far reaching consequences for many Irish business, particularly in the uncertain atmosphere surrounding Brexit.

One of the hardest hit sectors in this Budget, and the first to speak out against it is the tourism sector. It goes without saying that Ireland thrives massively on our culture of tourism and being the well-known “land of a thousand welcomes” so in the current uncertain Brexit climate it has come as quite a shock to this sector to receive the cutting blow of the removal of their special 9% VAT rate, to be replaced with the standard 13.5% rate going forward. It is estimated that this will cost the sector up to €500million a year, and that this is where the funds have been accessed to make the rest of the Budget’s announcements possible.

The idea for the removal of this rate was originally floated by Finance Minister Paschal Donohoe ahead of Budget 2018, but with Brexit looming this did not come to pass. The change comes following last July’s critical Department of Finance report which heavily suggested the special rate be scrapped, believing it to have served its purpose and to no longer be worth the cost to The State. In hindsight, glancing at the report now, the writing has been on the wall for this change for some time. Unfortunately for our tourism and hospitality sector, this does not make the pill any easier to swallow.

One of the most severe problems with this change is that Dublin has already been experiencing soaring hotel room rates in recent months. Chief Executive of the Irish Hotels Federation Tim Fenn has said that there has been widespread shock among the hotel industry.

“While we recognise that there was a need to raise revenue, in doing so it was incumbent on the Government to nurture growth in the economy. Tourism is growing. It is giving over €2billion a year to the Exchequer. 9% VAT was about the right rate, it brought us into line with our competitors in Europe, now 26 countries in Europe have a lower VAT rate. We are expected to compete with that”.

It remains to be seen what lasting effects this change will have on Ireland’s vital tourism sector and we hope that our clients and friends in this sector will find themselves weathering the storm to come out on the other side stronger.

As always, should you require any help or guidance on any financial or business matters, please don’t hesitate to contact us here at Ecovis DCA, where we are always happy to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Significant PAYE Changes Coming

Rolling with the Changes.

Following on from our recent series on modernisation, today we will be discussing some more imminent changes which are set to change the face of payroll as we know it. As you will all be aware, we here at EcovisDCA have long been great supporters of Irish SMEs (Small and Medium Enterprises). As we have discussed in the past, SMEs now make up over half of all Irish businesses, so to say they now form the backbone of Irish business is no exaggeration. In the past we have spoken at length about new methods of funding available to these vital businesses as we continue to support their survival. This week we have decided to take a look at one major upcoming change which could have a large impact on SMEs and which they may need to begin planning for as soon as possible.

This year it was announced that the PAYE (Pay as You Earn) system would undergo what is likely the largest overhaul the system has experienced since it was introduced in 1960. These changes will have wide ranging effects on all businesses. Having remained largely unchanged for decades, the system is naturally due a major changes and such a large change could of course have detrimental effects on any smaller businesses who may not be as prepared as they could be. These changes are due to come into effect in January, so time is running out to get fully prepared. It is intended that these changes make the payroll process an easier task going forward as well as allowing any issues to be resolved more efficiently.

A survey commissioned recently by payroll software providers Big Red Cloud has discovered the worrying fact that a large number of SMEs do not feel prepared for these imminent changes. While many firms reported that they feel there isn’t enough clear information to hand, as many as 40% feel that they are unprepared and short on detail of how the changes will work in practise.

Rather than payroll information being logged yearly via a form, many of our current ‘P’ forms will become outdates, with data being instead inputted on a regular basis. This new system will require an update of company payroll software, with companies employing less than 9 people qualifying for free software. This is a major shift towards real-time electronic logging of data which will remove the need for the classic forms.

Big Red Cloud CEO Marc O’Dwyer has said of the company’s findings:

“As the year progresses, it is becoming increasingly apparent to us that, not only are many businesses not ready, many are simply unaware and/or uninformed of the changes and what they will mean for their business.”

Whilst Revenue Chairman Niall Cody has stated that the changes:

“Represent an important step in the continuous improvement in service […] businesses, particularly those at the smaller end of the scale will need some help to get there.”

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Budget 2019

We constantly hear about how fast Christmas comes around each year and already selection boxes are appearing in our grocery stores and social media posts are being put up about how many weeks remain until Christmas. However, does anything really come around quicker than the Government’s yearly budget? It seems like only yesterday that we were giving you the main points on last year’s budget and now here we are again to break down the key points of this year’s budget. Indeed this year’s budget seems to have entirely crept up on us all, and slid into the world without much of a fanfare. So, what does Budget 2019 have in store for us all in the coming year?

SMEs

As you are aware, we are huge supporters of Irish Small and Medium Businesses so there was some welcome news announced in the budget.

A future Growth Loan Scheme for SMEs and those in the agriculture sector will be launched.

€110million in Brexit measures will be put in place.

Taxes and Wages:

  • There will be a reduction in the third rate of Universal Social Charge (USC) from 4.75 to 4.5%
  • The second rate band threshold for USC will increase from €19,372 to €19,874
  • An increase in the tax free threshold on transfers between parents of children will take the threshold from €310,000 to €320,000.
  • Weekly threshold for higher rate of employer’s PRSI will increase from €376 to €386.
  • Minimum wage to increase to €9.80 from January 1st.
  • VAT to increase from 9 to 13.5%.
  • Self-Employed individuals will receive a further €200 to their earned income tax credit.

Housing:

This has been a hot topic this year and something that has hit the headlines on numerous occasions. What action are the government implementing?

  • There will be €2.3billion allocated to the housing programme.
  • An additional €121million will be allocated to the Housing Assistance Payment.
  • €60million allocated to funding emergency accommodation and €30million allocated to homelessness services.
  • There will be funds allocated to a ‘Serviced Sites Fund’ which will aim to have local authorities begin to provide affordable housing.
  • Mortgage interest relied to be increased to 100% for landlords.

Social:

  • All weekly social welfare payments will increase by €5 from next March.
  • Christmas bonus to be fully restored this year.
  • From November 2019 a new parental leave scheme will offer 2 extra weeks leave to all parents in the first year of the child’s life. The aim will be to increase this to 7 weeks over time to bring Ireland more in line with other European countries.

The government have come under fire for this budget as it has been suggested that it doesn’t go far enough on crucial matters from climate change to tourism and national debt. This is however the first time that we have seen the national books balanced since 2007 so it is hopefully a step in the right direction.

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Revenue’s New ‘Digital Transaction’ Tax

Tax for the Memories

Taxation is always a hot topic of conversation, particularly in recent months as Revenue have begun to clamp down on issues of taxation from non-filing and late filing to fraud. With Brexit continuing to cast a shadow of uncertainty over us here in Ireland, our focus moves more into Europe. Recently two new legislative proposals have been put forward by the EU Commission which could possibly have unforeseen consequences for Ireland.

These proposals relate to digital tax and aim to create a turnover-based tax in an attempt to provide both a long and short term solution for the treatment of digital tax transactions. Essentially, the proposals will involve a 3% tax on gross revenues of certain digital transactions based on the location of target customers, meaning that the targeted consumer area will be issued with a tax payment, creating a sort of symbiotic tax relationship between the country of origin and the country of consumption. An apparent win-win situation as both countries receive something positive whether a tax payment or the revenue from the endeavour itself.

To begin with, this will only apply to larger companies with turnover in excess of €750m worldwide, but it is hoped that in the longer term, these plans can apply to a wider range of companies. It has been suggested that the proposals are in direct contrast to the normal tax principles in that it applies to where customers are located as opposed to where the work actively takes place, and also doesn’t take into account whether the company is making any profits as it is generally based on gross revenues. It has also been suggested that it will be far more difficult to quantify as rather than the standard procedures, it will involve converting customer data and satisfaction into actual facts and figures for taxation purposes. This has been suggested as being somewhat damaging for the Irish market which has a long history of exporting. It has also been suggested that this could be damaging for Ireland as it somewhat diminished the value of our 12.5% tax rate as this digital tax becomes a cost for Irish companies. A reduction in the appeal of our tax rate could result in Ireland becoming a less attractive prospect.

It has also been suggested that these proposals could have adverse effects on competition and be economically damaging should these short term proposals be in place for longer than expected as a longer term solution is formulated. These proposals could potentially penalise smaller countries whilst rewarding larger, this would of course be damaging to Ireland. Perhaps the longer term solution will factor in the value both of the country of origin and the country of consumption, but both this and any adverse or positive effects remain to be seen.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Revenue will no longer add charges for payments via Credit Cards

Re-Charging your Wallet

The convenience that comes with our current modern lives of being able to pay for and receive items immediately digitally as well as dealing with many or our transactions in a virtual manner does of course have its downsides. Whilst modern life has us all connected to each other at all times via our phones this does cause a new innate lack of face to face conversation and whilst being able to pay online using our cards is convenient, there is also the downside of so many hidden charges being applied to our accounts that we may not have accounted for in our budgeting.

There was good news in this regard earlier this month as it was announced that as of April 5th 2018, Revenue would no longer be adding charges for payments via credit card, whether these cards are personal, business or international. This will bring Ireland in line with new EU Rules enforced early this year which banned any surcharges on payment of tax liability. This charge could add as much as 2% onto the tax bill of those paying online. Revenue’s previous 1.1% charge was as a result of service provider charges, which will now be abolished for these payments.

Revenue have stated that this is in line with their focus on making it easier and more convenient for customers to do business online, which can only be a positive step in our busy digital modern lives, and one which we think will be of great benefit to all. Revenue have already taken steps to make online transactions easier with the upgrading of their MyAccount online service which takes the headache out of a great many tax issues and allows people to do most of their transactions from the comfort of their homes or offices, so we welcome any further changes that will ensure our clients and friends have clearer minds and fuller pockets at the end of the day.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Revenue – New Changes To Be Aware of

We have spoken at length in the past about the many ways in which Revenue are striving to make it easier and more convenient for people to deal with their tax transactions online, from a revamping of the MyAccount system to a reduction in fees and a strong clamp down on evasion using all the digital tools at their disposal there has never been a better or simpler time to file or query your tax transactions.

Next year (2019) there is set to be an overhauling and modernisation process in place for PAYE. Throughout the month, employers are due to receive letters from Revenue detailing their plans for PAYE Modernisation. This modernisation will result in real time PAYE reporting and is due to be officially put into place in January 2019. The letters will be tailored to the company’s requirements utilising Revenue records as there will be different categories of letter issued to ensure that companies receive the information most relevant to their business. Companies using payroll software or smaller companies will receive different information than those who do not use software, or larger companies for example. Employers will be asked to submit employee lists and relevant details regarding their employees to Revenue later this year in order to set the wheels of PAYE modernisation in motion.

In addition to this major overhaul, there will be many other changes made, this month a new PPS number checker will be available via the online services allowing up to 10 PPS numbers to be verified at a time using names and the given PPS number, this will certainly be a vital new service. Later in the year a number of changes will be made to the Revenue Online Services (ROS) dashboard, giving a new look and increased functionality to the system. There will be a new service for “Employer Payroll Services” and a new “favourites” option allowing easier access to most used options.

It is hoped that these new changes will increase the ease with which employers and business owner can process their dealings with Revenue and that the increased functionality of the website itself will limit any confusion or issues making life easier for both the employer and Revenue as it should limit late filing issues etc.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY