In just a matter of weeks we will be into the new year, and with that comes new rules from the Revenue Commissioners on PAYE reporting. Anyone with a PAYE employee will have to submit information ahead of each pay day and Revenue will be able to see details of each employee’s pay and tax deductions in real-time.
If you have full-time staff, casual labour or are paying your sons or daughters for working on the farm then this applies to you.
There are 10,700 farmers who are registered as an employer, employing 24,400 employees, according to figures from Revenue.
To prepare for the changes to the system, employers were asked to submit a list of employees through Revenue’s Online Service (ROS). By mid-October, over 50,500 employers submitted their employee list. Over 30,000 of the employers, who submitted their employee list, have five or less employees.
Farm accountant business ifac has hired 11 extra staff in its Kilkenny office to help process additional paperwork when the new rules come in.
“Under the new system, a Revenue Payroll Notification (RPN) will replace the tax credit certificate (P2C). You will have to provide details of each employee’s pay and statutory deductions to Revenue on or before every pay date.
‘‘Bonuses, shares, commission and benefits-in-kind need to be included. From January, benefits-in-kind such as a company car will need to be spread over the year and taxed in each pay period,” Mary McDonagh, head of payroll services at ifac, says.
At the end of each month, Revenue will provide a statement summarising the information that you have provided. You will be able to view this statement on ROS from the fifth day of the month and you will have until the fourteenth day of the month to check and correct your reports for the previous month.
Employees starting their first job are encouraged to register on Revenue’s ‘‘MyAccount’’ service, a single access point for secure online access to individual taxpayer services including PAYE, local property tax, the home renovation incentive and various other reliefs and incentives.
For now, employers need a P2C for each employee and PPSN numbers. If you have not already done so, a P45 must be issued to any employee no longer working for you. If the business is structured as a company, a list of company directors must be included on the list of employees.
A PPSN checker is available on ROS and you can also use ROS to check if Revenue has issued a new RPN.
Paying employees
There is no change to the way employers make payments to Revenue, Mary McDonagh advises.
“If you currently pay Revenue on a monthly or quarterly basis this will continue under the new regime.
‘‘However, while the payment due date will remain the same, a monthly statement will be issued by Revenue detailing the previous month’s PAYE, PRSI and USC liabilities. It will be very important to provide accurate information for each pay period as in future you will not be able to correct errors on the P35 at the end of the year.”
Penalties
The real-time reporting system will flag discrepancies quicker. If you don’t comply with the new PAYE rules, a Revenue Audit could lead to fines or penalties.
“Penalties for non-compliance are substantial as each breach can attach a €4,000 fine. Samples of non-compliance are not having an updated RPN for an employee, or late submissions to Revenue,” said McDonagh. “In addition, if you do not pay the correct tax due, you could be liable for interest on the underpayment at a rate of 10% per annum.”
Options
As an employer, you can get payroll software or outsource it to a payroll service provider.
If you already use payroll software, check that your software provider is ready for the new PAYE regime and has run the Revenue public interface test. You should also ask if there will be any additional charges due to the regime and what supports they will be providing for you when real-time reporting comes into operation on 1 January 2019. If you are not using a payroll package, you will be able to request your employees RPNs through ROS. It will provide you with the necessary information to deduct the correct income tax.
Employing a son or daughter
In some cases, farmers pay their sons/daughters by way of standing order on a monthly basis.
Rather than reporting this and calculating tax at the end of the year, you will need to make a submission to Revenue each time your son or daughter is paid.
The submission to Revenue must be done on or before the date of payment.
You can do it through a payroll system (software package for your computer) or you can use a service provider such as ifac to make the submission to revenue.
A Revenue Payroll Notification (RPN) must be requested each time, to ensure compliance.
As an employee, your son/daughter is encouraged to sign up to Revenue’s online system as a PAYE employee by visiting: https://www.revenue.ie/en/online-services/services/register-for-an-online-service/register-for-myaccount.aspx
To create an account you will need to provide the following:
Personal public service number (PPSN).Date of birth.Phone number (mobile or landline).Email address.Home address.You can get instant access to myAccount if you can verify your identity with two of the following:
Irish driving licence number.Information from your P60 form.Information about your income tax.Notice of assessment or acknowledgement of self-assessment from Revenue.Contracting business
The Irish Farmers Journal spoke to an agricultural contracting business in the southwest that wished to remain anonymous. The company does all its own accountancy work. To prepare for the changes to the business, it has bought a payroll package called ‘Big Red Book’.
“Before, I was doing payroll on excel and submitting it on a quarterly basis. Now, you have to submit PAYE details before you pay anyone. It sounds relatively straightforward. The only hiccup is you have to sit down on a Thursday or Friday and submit these details to Revenue if you are paying weekly.
“If you are flat out at silage you are not necessarily going to have it done or think of doing it. I don’t know if there are particular cut-off times.
‘‘If we’ve a breakdown and a part goes I run for the parts. My job is to keep everything going. When the deadline hits I could be halfway to Cork for the part and by the time I get back it could be half seven. It’s only going to be for those couple of weeks of first cut, second cut and corn. Any other time of year you’d work around it.
“Technically, if you have a seasonal worker you should issue a P45 at the end of the season, but there was a tendency to let it roll on. I’m hoping there will be a year for transition where I will get a bit of advice.”
Read more
Changes to tax rules to affect farmers
In just a matter of weeks we will be into the new year, and with that comes new rules from the Revenue Commissioners on PAYE reporting. Anyone with a PAYE employee will have to submit information ahead of each pay day and Revenue will be able to see details of each employee’s pay and tax deductions in real-time.
If you have full-time staff, casual labour or are paying your sons or daughters for working on the farm then this applies to you.
There are 10,700 farmers who are registered as an employer, employing 24,400 employees, according to figures from Revenue.
To prepare for the changes to the system, employers were asked to submit a list of employees through Revenue’s Online Service (ROS). By mid-October, over 50,500 employers submitted their employee list. Over 30,000 of the employers, who submitted their employee list, have five or less employees.
Farm accountant business ifac has hired 11 extra staff in its Kilkenny office to help process additional paperwork when the new rules come in.
“Under the new system, a Revenue Payroll Notification (RPN) will replace the tax credit certificate (P2C). You will have to provide details of each employee’s pay and statutory deductions to Revenue on or before every pay date.
‘‘Bonuses, shares, commission and benefits-in-kind need to be included. From January, benefits-in-kind such as a company car will need to be spread over the year and taxed in each pay period,” Mary McDonagh, head of payroll services at ifac, says.
At the end of each month, Revenue will provide a statement summarising the information that you have provided. You will be able to view this statement on ROS from the fifth day of the month and you will have until the fourteenth day of the month to check and correct your reports for the previous month.
Employees starting their first job are encouraged to register on Revenue’s ‘‘MyAccount’’ service, a single access point for secure online access to individual taxpayer services including PAYE, local property tax, the home renovation incentive and various other reliefs and incentives.
For now, employers need a P2C for each employee and PPSN numbers. If you have not already done so, a P45 must be issued to any employee no longer working for you. If the business is structured as a company, a list of company directors must be included on the list of employees.
A PPSN checker is available on ROS and you can also use ROS to check if Revenue has issued a new RPN.
Paying employees
There is no change to the way employers make payments to Revenue, Mary McDonagh advises.
“If you currently pay Revenue on a monthly or quarterly basis this will continue under the new regime.
‘‘However, while the payment due date will remain the same, a monthly statement will be issued by Revenue detailing the previous month’s PAYE, PRSI and USC liabilities. It will be very important to provide accurate information for each pay period as in future you will not be able to correct errors on the P35 at the end of the year.”
Penalties
The real-time reporting system will flag discrepancies quicker. If you don’t comply with the new PAYE rules, a Revenue Audit could lead to fines or penalties.
“Penalties for non-compliance are substantial as each breach can attach a €4,000 fine. Samples of non-compliance are not having an updated RPN for an employee, or late submissions to Revenue,” said McDonagh. “In addition, if you do not pay the correct tax due, you could be liable for interest on the underpayment at a rate of 10% per annum.”
Options
As an employer, you can get payroll software or outsource it to a payroll service provider.
If you already use payroll software, check that your software provider is ready for the new PAYE regime and has run the Revenue public interface test. You should also ask if there will be any additional charges due to the regime and what supports they will be providing for you when real-time reporting comes into operation on 1 January 2019. If you are not using a payroll package, you will be able to request your employees RPNs through ROS. It will provide you with the necessary information to deduct the correct income tax.
Employing a son or daughter
In some cases, farmers pay their sons/daughters by way of standing order on a monthly basis.
Rather than reporting this and calculating tax at the end of the year, you will need to make a submission to Revenue each time your son or daughter is paid.
The submission to Revenue must be done on or before the date of payment.
You can do it through a payroll system (software package for your computer) or you can use a service provider such as ifac to make the submission to revenue.
A Revenue Payroll Notification (RPN) must be requested each time, to ensure compliance.
As an employee, your son/daughter is encouraged to sign up to Revenue’s online system as a PAYE employee by visiting: https://www.revenue.ie/en/online-services/services/register-for-an-online-service/register-for-myaccount.aspx
To create an account you will need to provide the following:
Personal public service number (PPSN).Date of birth.Phone number (mobile or landline).Email address.Home address.You can get instant access to myAccount if you can verify your identity with two of the following:
Irish driving licence number.Information from your P60 form.Information about your income tax.Notice of assessment or acknowledgement of self-assessment from Revenue.Contracting business
The Irish Farmers Journal spoke to an agricultural contracting business in the southwest that wished to remain anonymous. The company does all its own accountancy work. To prepare for the changes to the business, it has bought a payroll package called ‘Big Red Book’.
“Before, I was doing payroll on excel and submitting it on a quarterly basis. Now, you have to submit PAYE details before you pay anyone. It sounds relatively straightforward. The only hiccup is you have to sit down on a Thursday or Friday and submit these details to Revenue if you are paying weekly.
“If you are flat out at silage you are not necessarily going to have it done or think of doing it. I don’t know if there are particular cut-off times.
‘‘If we’ve a breakdown and a part goes I run for the parts. My job is to keep everything going. When the deadline hits I could be halfway to Cork for the part and by the time I get back it could be half seven. It’s only going to be for those couple of weeks of first cut, second cut and corn. Any other time of year you’d work around it.
“Technically, if you have a seasonal worker you should issue a P45 at the end of the season, but there was a tendency to let it roll on. I’m hoping there will be a year for transition where I will get a bit of advice.”
Read more
Changes to tax rules to affect farmers
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