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Latest News

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The biggest issue facing employers at the moment is the new “real-time” reporting regime, known as PAYE Modernisation, for PAYE that went live on 1 January 2019. From this date, you must make a submission to Revenue on or before making a payment to an employee. After the end of each calendar month, Revenue will issue a statement based on submissions received, which sets out the tax due for the period. The statement is deemed a statutory return by the 14th day after month end. Where errors are made, there is scope to amend the statement in advance of the 14th day of the following month. Payroll taxes are then remitted to Revenue by the 23rd day of the following month. The P35 filing will also no longer be required – the reporting process must be correct for each pay period, otherwise penalties may apply. If not already done so, employers should immediately review their payroll procedures to ensure that accurate information is provided on a timely basis. It is important to have all stakeholders involved so they understand the need for improved processes. How does this effect benefits-in-kind and notional payments? Revenue has advised that benefits-in-kind (BIK) and other notional payments should be reported by: a) The day the BIK or notional payment is made; or b) The earlier of the next pay day or 31 December in the year. A “best estimate” of the taxable value should be included in the next payroll submission after the benefit/notional payment is provided. When the actual value becomes known, an adjustment is to be processed in the following payroll submission. Revenue expect these items to be reviewed regularly – at least quarterly – with adjustments processed in the next payroll submission. Does this also apply to taxable expenses? Revenue has advised that a payroll submission is required on or before any taxable cash payment is made to employees. Many employers reimburse employees for items that, while allowable under the company expense policy, are taxable. To date, these items are generally picked up through retrospective reviews throughout the year and before the P35 is filed. This type of catch up exercise will no longer be possible. Employers should review internal processes to ensure taxable expenses can be identified in advance of reimbursing employees. Further complexities may arise where expenses are reimbursed by the Accounts Payable department or off-payroll-cycle as additional payroll submissions may be required. What about company credit cards? Revenue has confirmed that the use of company credit cards are considered notional payments with the benefit being provided at the date the credit card is used (and not when the credit card bill is settled). Such items should be included in a payroll submission and reported to Revenue by: a) The day the benefit is provided; or b) The earlier of the next pay day or 31 December in the year. This may create practical difficulties for employers in determining what items are reportable each period as you may not have oversight of the taxable expenses incurred until a later date when the employee submits expense details. What will happen if my organisation isn’t compliant? The current penalty regime provides for a €4,000 fixed penalty for each breach of the PAYE regulation. There is also provision for a €3,000 fixed penalty imposed on the company secretary for each breach. These penalties can be imposed on a per-item basis, so if you are even a mid-size level employer, these penalties can mount up. While Revenue have stated that the penalty and self-correction regimes are under review, it is hoped that penalties would only be enforced for significant breaches and only in situations displaying evidence of deliberate behaviour.  However, as things stand, they could be applied to any correction of, or omission from, a payroll submission. Colin Forbes is a Tax Partner of Global Employer Services in Deloitte.

Jan 14, 2019
Brexit

With 29 March 2019 fast approaching and the prospect of a no-deal Brexit still looming, award-winning journalist, author and broadcaster Ian Kehoe will explore the impact that Brexit will have on industry in Ireland and how best Ireland can respond to the challenge. Book your free place using this link.

Jan 07, 2019
Brexit

We would like to update you, our members, on information that has recently become available regarding audit registration status for those firms holding audit registration from Chartered Accountants Ireland (‘the Institute’) in the event of a ‘no-deal Brexit’.  At present, the audit regulatory framework that exists between the UK and Ireland is such that firms holding audit registration from the Institute are able to hold audit appointments in respect of both UK and Irish entities.  In simple terms, for example, this has enabled statutory audit firms ‘located’ in  Northern Ireland or Great Britain to audit Irish registered entities while statutory audit firms ‘located’ in Ireland have been able to audit UK-registered entities.   In recent weeks, both the UK and Ireland have provided further information in respect of the recognition of statutory audit firms post Brexit.  As regards the UK, the Department of Business, Energy, and Industrial Strategy (‘BEIS’) has confirmed that in the UK, the status quo will remain, deal or no-deal, at least until December 2020.    However, in late October the Irish Auditing and Accounting Supervisory Authority (‘IAASA’) announced that, in the absence of any transitional arrangements that might be contained in any withdrawal agreement, and based on advice received from Ireland’s Attorney General, UK-based audit firms would no longer meet the eligibility criteria for approval as EU statutory auditors and therefore would not be entitled to hold audit appointments for Irish companies post Brexit.  After 29th March, therefore, UK-based auditors would be unable to sign audit reports on Irish entities and as such, will no longer be eligible for inclusion on the Irish audit register.   Irish company law does, of course, make provision for the recognition of statutory auditors from a ‘Third Country’, which is what the UK will become post-Brexit.  However, such recognition is subject to appropriate regulatory arrangements being established between Third Country jurisdictions and Ireland (IAASA) which would include equivalence/reciprocity regimes etc.  In spite of the existing arrangements essentially reflecting such a regime, formalising such new arrangements will take time and unlikely to meet the 29 March 2019 deadline.   While it is hoped that the above scenario can be avoided by virtue of appropriate transitional arrangements, I believe it is appropriate, and as counselled by IAASA, to advise those firms (UK-based) who may be impacted by the above to consider what action they may need to take as regards audit appointments of Irish companies they may have.   Specific issues firms will need to consider will include:   The need to make contingencies as regards the audits of Irish entities in the event of a no-deal Brexit – e.g. advising clients of this possibility and the logistics of the client identifying an alternative auditor located in Ireland; Whether it might be possible to undertake and complete statutory audits of Irish entities, including signing the audit reports before 29th March 2019, having due regard to audit quality;  Whether the audit firm has an office ‘located’ in Ireland to which the audit appointment might be reassigned, or whether within the network of which the audit firm might be a member, there is an Irish located firm to which the appointment might be transferred. Note that there is at present no clarity or certainty to this particular point.This is one of a number of matters that have been raised with regulatory bodies. Further information on the respective UK and Irish positions regarding statutory audit can be found:    Accounting and Audit if there is No-Brexit Deal; and IAASA Breakfast Briefing Summary  The Institute continues to engage with relevant regulatory bodies and Governments on this issue and related issues with a view to obtaining further clarifications and explanations.  In this regard, specifically, we have provided a series of questions and scenarios to IAASA. We shall keep you advised of additional information as it becomes known. You can read our key questions here.   While the above is likely to arise only in the event of no ‘withdrawal agreement’ between the UK and the EU, it is important that firms be aware of the possible outcomes if such occurs. If there is anyone with any queries or concerns, please contact Aidan Lambe, Director of Professional Standards, Chartered Accountants Ireland. Aidan.lambe@charteredaccountants.ie

Nov 27, 2018