The most significant reform of the PAYE system since its introduction in 1960 is underway. Businesses and employers have until the start of 2019 to get their houses in order.

PAYE Modernisation – what’s the main issue, what’s being reformed? In a nutshell, it’s about filing returns to Revenue in real time.

Employers will have to calculate and report their employees’ pay and deductions as they are being paid.

“Current practices will have to change,” says Ray Rogers, CEO of Surf Accounts (pictured). “This is especially true if you pay employees net. Revenue now wants to see all tax deductions returned in real time, on the day people are paid.”

As this is a Revenue reform, there will be strict fines for businesses that don’t comply with the new rules.

“Big changes like this rarely run smoothly,” says Rogers. “I’d advise any business to look into this reform and put the necessary fixes in place. There will be a €4,000 fine per employee that hasn’t been returned,” says Rogers.

Revenue expects all businesses to comply with these changes from the minute they come into force on January 1, 2019.

“For small businesses who feel they may have knowledge gaps in the handling of payroll, they have two options,” says Rogers. “The can train their payroll operators if their PAYE knowledge isn’t up-to-date or, they can outsource their payroll to an accountant.”

Goodbye to the P45

Another major part of the reform will be the abolition of all Revenue forms as we know them – namely, the P45, P30, P35, and the P60.

From January 1, 2019, people looking for a mortgage won’t be able to get a p60 to prove their earnings, they’ll just go to the ‘My Account’ portal on the Revenue website and print out what they need.

For full details on the changes to happen, you can download this guide from Surf Accounts.

Revenue is hosting a series of seminars across the country in the run up to the modernisation deadline.

You can find out more and book your place here.

This post was originally published here - https://www.thinkbusiness.ie/articles/paye-modernisation-are-you-ready-for-the-new-paye-system/ on