In one of the most radical overhauls to the personal tax reporting system in Ireland, the Irish Revenue Commissioner has revealed the P45 and P60 are to be replaced.

Revenue chair Niall Cody revealed that much of the paperwork associated with paying income tax will disappear with the P45 and P60 being replaced by a real-time system.

The Irish tax authority reported that Revenue collected total net receipts of €73.9bn in 2019, including €58.4bn in taxes and duties for the Exchequer and €15.5bn on behalf of other Departments, agencies and EU member States.

“The introduction of real-time reporting for PAYE was the most significant reform of the administration of the PAYE system since its introduction in 1960”

“Along with increased Exchequer receipts, there was continued very high levels of timely, voluntary compliance, reflecting the fact that the vast majority of taxpayers do the right thing and pay the right amount of tax, on time,” Cody said.

“We are very conscious of the need to support taxpayers to be voluntarily compliant by providing quality service in a timely, cost effective way. We optimise our service through continued investment in high quality and secure digital and self-service channels. We acknowledge and appreciate the engagement of taxpayers, and that of tax practitioners and agents, in the very strong compliance that was a feature of the year just gone.”

Real-time reporting

An Employment Detail Summary will replace the traditional forms from next month (February).

“The introduction of real-time reporting for PAYE was the most significant reform of the administration of the PAYE system since its introduction in 1960,” explained Ruth Kenndy, Revenue’s project manager in charge of PAYE modernisation.

“In 2019, over 181,600 employers made 6.1m payroll submissions, reporting gross pay and pensions of over €98bn. The total Income Tax, USC and PRSI paid to the Exchequer for 2019 was €31.6bn.

“The new real-time reporting arrangements also bring tangible benefits for employees, including the ability to view their payroll details (pay, tax, USC and PRSI), as reported to Revenue by their employer, through myAccount.

“To date more than 191,000 such taxpayers have availed of this service. Revenue is also providing employees with an online Employment Detail Summary in myAccount, which replaces the Form P60. The Employment Detail Summary provides the employee’s income and deduction details for 2019, as reported to Revenue by their employer and can be used in the same manner as the Form P60, for example, as proof of income to a third party.”

Brexit engagement

In addition, in its end-of-year-statement Revenue revealed a significant rise in Brexit engagement with Irish firms.

“Revenue’s Brexit preparedness and contingency planning is strongly focused on supporting and helping businesses to plan and prepare for Brexit,” Cody said.

“In 2019, we appointed 586 staff to Brexit-related roles. We had significant engagement with businesses that trade with the UK, writing to over 103,000 businesses with Brexit preparatory advice, and contacting almost 29,000 business via telephone.

“As a result of these engagement programmes, there was a significant increase in customs registrations with over 24,100 businesses acquiring an Economic Operator and Identification (EORI) number in 2019.”

Be compliant

Cody said that Revenue is continuing with its mission to confront non-compliance.

“During 2019, we completed over 567,000 compliance interventions, yielding €547.6m, seized 259 unlicensed gaming machines, settled 127 tax avoidance cases yielding €29m and secured 15 criminal convictions for serious tax evasion and fraud. We also published 214 tax settlements in the List of Tax Defaulters.

“We continue to target and disrupt all forms of shadow economy and illegal activity. Last year Revenue seized over 13m cigarettes worth €8.5m and 3,229 kilos of drugs with an estimated value of over €23.5m.”

Cody reiterated Revenue’s message about the importance of early engagement if compliance challenges, such as temporary cash flow or trading difficulties, emerge for a business.

“Sending in returns on time and agreeing a payment arrangement with Revenue is the most sensible and effective way to address such challenges.

“We work very successfully with businesses and individuals who engage with us to resolve their payment difficulties as evidenced by the fact that, at the end of 2019, we had phased payment arrangements in place with over 5,800 businesses and individuals covering €72m in debt.”

Written by John Kennedy (john.kennedy3@boi.com)

Published: 7 January, 2020

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