PAYE Modernisation

It’s likely you may have already heard of the term PAYE Modernisation since it was first announced in Budget 2017. Revenue billed it as the ‘most significant reform of the PAYE system since its introduction in 1960’ at the time and that is exactly what it has been. Most employees and employers probably didn’t pay much attention when it was announced, as it seemed like a long time away at the time, but 2019 has been and gone and we are now a full year into the new system. We decided to list some of the key changes that employees have already been facing throughout the year, and also what to expect from the start of 2020.

P60 Replacement

One of the main changes under PAYE Modernisation is that an employer is no longer obliged to provide their employee with a P60 document. Revenue will provide a replacement document called a ‘Employment Details Summary’ available at the end of 2019 and this will contain income and deduction details from each employment for 2019. It can also be used then for income verification purposes with financial institutions, e.g. HSE, County Council, etc. for a loan, grant, etc. An employee can now also transfer this securely as a PDF document.

Preliminary End of Year Statement

This will be available from late January based on all of your income details provided by your employer. This will show your total Income Tax and USC due, as well as the total for each that were actually paid.

Statement of Liability

Previously called the P21 balancing Statement, this is the updated name given to the yearly statement of your pay and tax details for all previous years. In order to obtain a final Statement of Liability, an Income Tax Return will need to be completed for the relevant year.

Income Tax Return

Previously called the Form 12, this is the updated name given to the yearly return for all previous years.

Employment Registration

It is now easier to register a new employment with Revenue. If you start a new job, it is your employer who has to register the employment with Revenue but the employee can also still do this if they so wish.

The only exception to this is where the employment is your first employment in the state then it is the employee who has to register the employment with Revenue.

Real Time Accurate Data

Employees can view what information their employer has submitted on their behalf as it actually happens, so information is more transparent and up to date compared to previous years. This will help against rogue employers who deduct PAYE, USC and PRSI from their employees but who do not pay this over to Revenue, by highlighting these cases earlier.

We always recommend getting your taxes checked each year to ensure that you paid the correct amount of tax in the year and to claim any refunds that you may be entitled to.

Hope we have shed some light on the changes that have come about as a result of PAYE Modernisation.

Written by,

Ray Byrne
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