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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

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

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

PAYE Changes

Unfogging the Small Print

The new year period is a time of change each year and whilst so often many of our ‘New Year, New Me’ promises may not stick, there are certain changes in the financial field that are occurring this year that it would be easy to miss. As always, we want to keep you as fully informed as possible.

Until recently, some tax assessment was on what is known as the “earnings basis” and was calculated regardless of whether or not the income was paid to the individual during that assessment year. The PAYE system operates on what is known as the “receipts basis” as in the employer deducting tax from the income at the time of payment to employee. New changes to the Finance Act of 2017 will bring order to confusion and bring all in line with the PAYE system of operations, meaning that all assessments will be moved to the “receipts basis” of assessment.

Changes have been made to the PAYE (Pay As You Earn) system from January 1st 2018 that not everyone may be aware of. As of the beginning of this year, the statutory basis of assessment for most employment income is the actual amount of income received, thus placing the basis of assessment for Schedule E income in line with the operation of PAYE.

Further changes will be in effect from January 1st 2019 including a further modernisation of the PAYE system. From next year, employers will be required to report relevant payroll data to Revenue no later than the date of payment to the employee. There will then be an automatic end of year review carried out on all PAYE customers for the year 2019 and subsequent years.

There are a number of exclusions to the receipts basis who will not see this change, proprietary directors will not be required to make this move, and where there is a PAYE exclusion order in place, no changes will occur. The changes will be required of all other employers and employees.

It is hoped that these moves will have a minimal or non-existent effect on employers, who will still be required to make the deductions when payments are made using the PAYE system. Similarly, this move should also not affect employee wages. As we have discussed in the past, Revenue are eager to clamp down on outstanding tax issues, and are now making the positive move to bring everything in line on a statutory basis and bring parity where there was confusion.

For further information, we advise reading through the recently published Tax and Duty Manual Part 05-01-08 found at the Revenue website at your leisure.

Should you require any further guidance please do not hesitate to get in touch with us here at EcovisDCA where we will be happy to assist you in starting 2018 on the right foot.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE UP

In recent years life and business have been taking a turn for the seemingly more convenient with it becoming increasingly easy to complete important tasks and meet deadlines remotely or via phone. Banking too became more convenient with online banking beginning to take over and allowing customers to complete many banking transactions online. Similarly, issues like tax submission etc. have become more convenient with the advent of online systems and the availability of important submission forms to download.

The Revenue website is one area which has been making a marked move towards online services with many day-to-day checks and queries being able to be answered via the ‘myAccount’ area of the Revenue website. This week, Revenue have announced that development of the myAccount system is ongoing and that there would be changes imminent in the coming weeks, which we felt might be relevant to you.

Revenue have announced that from the middle of June, their PAYE anytime service would no longer be available. This is due to the ongoing works on the website and the findings that the service is not easily accessible on mobile devices. This shows a very marked belief in progress as the need to have all services easily accessed via a tablet or smartphone showcases our current and continued reliance on these devices. The PAYE anytime service was released in 2005 and has certainly served its time and purpose well but it is time to move on.

PAYE business will now be completed via myAccount through newly enhanced PAYE Services, easily accessed on all mobile devices. Interestingly, this will also be available through the very modern RevApp allowing you to have your tax issues and queries resolved at the push of a button.

Through these new services you will be able to:

  • Manage your tax 2017.
  • Review your tax 2013 – 2016.
  • Request an End of Year Statement (P21).
  • Add a Job or Pension.
  • View your Tax Credit Certificates and End of Year Statements (P21).

The new Revenue website will be available to view from early June on all mobile devices and PCs, we are never ones to complain about convenience.

Should you require any help, advice or guidance on your own tax or other business and financial matters, please don’t hesitate to contact us here at EcovisDCA where we will be happy to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

TAX BACK: WHAT’S THE CRAIC?

Claiming tax which you have overpaid is a common concern for most workers, yet it is one that is often overlooked. Each of us either know someone or is the person who is most likely to say “I think I have overpaid tax, I will definitely look into it” only to entirely forget and get on with daily life.

Although new tax reductions were introduced in the most recent budget, which may have had a slight effect on our wallets many workers are still feeling the tax pinch. To hopefully alleviate some of this stress, and replace some of the money into your own pocket where it belongs, we have collated some of the most common ways that you may have overpaid tax. Reports suggest that a great many people are unaware of having paid too much tax, and are failing to reclaim it. Many people are also unaware that you can claim for as far back as four years, so whilst you may be on track with tax payments now, it is possible that you can claim for previous years. I’m sure none of us would argue with having a few extra pennies in our wallets for the weekend.

Rental Tax Credit

This credit only applies to those who have been in rental accommodation on December 7th 2010, and is due to be phased out entirely. Before then however, you may be able to claim some tax back for your rental status.

Health Insurance

Those who have private health insurance, you may be entitled to claim some tax back. This will be dependent on the cost of your policy.

Marriage Tax

The common joke about tying the knot for the tax breaks is still doing the rounds, and is based somewhat in truth. If you have been married in the past four years and not notified Revenue, you may have overpaid tax and be eligible for a rebate. This is typically based on what you both earn and your income bands, and your joint assessment situation. Isn’t that what true love is?

DIRT

Whilst first time buying has become a minefield in recent years, the one small saving grace is the ability to claim back DIRT on savings for your deposit. Definitely something for first time buyers to bear in mind during the stresses of purchasing.

Travel Costs

Travelling to and from work every day can be a significant drain on your finances when paying full price for public transport. Employees can purchase a TaxSaver commuter ticket through their employers which allow tax free commuter tickets as part of a salary package.

Home Carer Tax Credit

Many people who have taken time out to care for children or elderly relatives are unaware that a tax credit can be awarded to the working spouse to ease financial worries. In Budget 2016, it was also announced that the cut off rate for the earnings of the non-working spouse would be raised from €5,080 to €7,200, meaning that this can apply to many more people than previously. The credit itself has also been increased this year from €810 to €1,000.

USC

Despite a reduction of the USC in the most recent budget, the USC remains a tax which is an irritation for many workers. There are a couple of ways in which you may have been overpaying this tax and be due a rebate, the most obvious one being in relation to medical cards. If you have a full medical card, you should notify Revenue of your change of circumstances as you may have overpaid USC. Also, if your income fell below the threshold at any point, Revenue should be notified.

Expenses

Many workers remain unaware that they may be entitled to claim tax back on a number of expenses aside from their travel costs. These costs can range from uniforms to tools for trades such as engineers and electricians. For teachers, an annual allowance of €518 is allotted for expenses incurred in terms of teaching supplies, and this applies to many other professions. It is advisable to check the Revenue website to see if you may be entitled to claim back on some of your own working expenses.

These are just a few ways that you may have inadvertently overpaid taxes, and may be able to claim a refund. We would recommend investigating your tax payments in full for the previous four years in order to ascertain if you are due a refund. Should you require any assistance with your own or your businesses finances please don’t hesitate to contact us here at DCA Accountants.