PAYE Modernisation or Real Time Reporting is the latest big policy overhaul in Ireland.
It’s also known as SMART PAYE and this is probably to facilitate then following snappy little memory jogger by the Revenue’s marketing department.
- Seamless integration into payroll.
- Minimize employer cost to comply.
- Abolition of P30s, P45s, P60s and end of year returns.
- Right tax paid on current due dates.
- Time savings.
The benefits of PAYE Modernisation are:
- Real time info to the Revenue so employees and employers will have the most accurate and up to date information relating to pay and tax deductions.
- It will improve streamlining of current business processes.
- It will put an end to under/overpayment of tax.
- Reduce administrative burdens experience at end of year when employers have to meet PAYE deadlines.
(RIIR PAYE doesn’t quite have the same ring to it but at least you are more informed now!
But what’s the bigger picture? Will all this change really have any effect in the long run besides a smoother PAYE process?
In order to answer this question let’s take a look at PMod’s predecessor Real Time Information (RTI), that was rolled out in the UK back in 2013. Did it do what it set out to do? How is RTI performing now?
Well the answer to the first question is absolutely!
The changes were all positive and HMRC and are able to deal with PAYE payments and debt more effectively, improving the flow of PAYE payments to the Exchequer, and has had a 99% integration rate. The programme’s Final Business Case reported that the introduction of RTI had enabled:
- Savings of £64m for HMRC
- Savings of £672m from reduced tax credits overpayments due to fraud, error and in year income discrepancy
- A one-off cash flow benefit to the Exchequer measured at £813m
- A net saving administrative burden for employees od £292m per annum.
- Data sharing with other governments departments has seen savings of £491m from correction of claims to DWP benefits other than Universal Credit (UC).
And how is RTI doing 5 years later? Well, according to the same post-implementation report the continuing benefits of RTI are as follows:
- There is a direct benefit for key government areas such as pensions, auto enrolment and student loans.
- Enabling tax and benefit systems to become more responsive. Tax codes are more accurate as are annual estimates of pay.
- Once UC is fully implemented RTI is expected to result in savings of £600m from prevented erroneous and fraudulent UC claims.
So there you have it, some cold hard facts and figures. If the UK is anything to go by, PMod is going to be hugely beneficial to Ireland.
We can’t predict all areas that it is going to help with but we can safely say that, as a country, they will be better off.
PAYE Modernisation with Payroll Software
Revenue has strongly advised employers to review their payroll processes and systems to ensure they meet the new PAYE Modernisation requirements for January 2019. Payroll software which caters for PAYE Modernisation will improve and simplify communications between employers and Revenue.
If you have the correct payroll software tools in place, the ongoing reporting to Revenue will be seamless, ultimately saving time and reducing the risk of errors each pay period. Employers using payroll software that is Revenue compliant will be able to create and send the periodic PSR submission directly to Revenue from the payroll software at the click of a button. This integration with Revenue will also allow employers to automatically retrieve RPNs for employees from within the payroll software. Changes to an employees tax credits and cut-offs can then be updated in the payroll software with just one click.
Free Online Training
Thesaurus Software and Revenue have teamed up to bring you free PAYE Modernisation training webinars. We have put together a series of webinars aimed specifically at employers who are currently processing their payroll manually. During the webinars, we will look at the advantages and disadvantages of manually processing your payroll for PAYE Modernisation. Places are limited – Click here to book your place now.
Thesaurus Software is at the forefront when it comes to PAYE Modernisation complaint payroll software. With two different payroll packages to choose from – Thesaurus Payroll Manager and BrightPay – customers will be guaranteed leading-edge software and expertise. To help single-employee companies with their PAYE Modernisation duties, we are offering a free BrightPay employer licence for 2019.