What is PAYE Modernisation?
PAYE Modernisation when initially announced is arguably the most significant change ever made to PAYE since it was introduced in the 1960’s. Set to come into effect on the 1 January 2019 this new and improved way of reporting will affect every employer and employee in the country.
What does it mean to me?
Essentially, what PAYE Modernisation will mean is that employers will be required to report pay, taxes deducted and any other deductions in respect of each employee every time they run their payroll, whether that be weekly or monthly, rather than once a year at Payroll Year End via the P35. The traditional reporting structure that businesses use, such as P30, P35, P45 will cease to exist.
Will it affect how I calculate PAYE?
PAYE Modernisation doesn’t change the way your business calculates PAYE, it just means regular submissions to Revenue are required. For those with experience of UK Payroll, it’s a similar concept to Real Time Information (RTI) where employers are obliged to file payroll returns electronically for each payroll run.
Why is it being introduced?
Having this real-time information will mean that Revenue will be able to issue accurate and timely instructions to businesses, ensuring that an employee’s tax position at any time is correct resulting in less under or overpayments of tax.
Revenue is encouraging all businesses to act now to ensure that they have appropriate systems in place to allow the transition to the new regime.
What are the benefits?
It is believed that PAYE Modernisation will, in the long run, streamline reporting obligations to Revenue, making PAYE submissions more efficient and reducing the administrative burden for all businesses.
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Our guide is packed with simple, straight-forward advice to help your business be PAYE Modernisation -ready.