40% of small firms unprepared for PAYE overhaul

Two-fifths (40%) of small businesses have said they are unprepared for the impending overhaul of the Pay As You Earn (PAYE) system that’s due to take effect in January.

That’s according to a recent survey commissioned by payroll software experts, Big Red Cloud, which also revealed that 66% of all small businesses are “short on detail” about the PAYE overhaul, with only 15% confident of being ready for the switchover.

The way in which payroll systems must interact with Revenue will change in the New Year, with employers required to submit payroll data more frequently.

It will be a fundamental shift from the present PAYE system, which requires businesses to submit detailed payroll data annually via a P35 form.

The existing PAYE system was introduced back in 1960, in an era when jobs were generally viewed as life-long vocations and payroll was still a manual system.

All aspects of how an employer meets their PAYE reporting obligations will change from the beginning of next year, as the Revenue seeks to implement a digital real-time PAYE system.

Long-standing forms including the P45, P46, and P60 will no longer exist, with everything to do with employment, statutory deductions and the end of employment contracts revamped.

Niall Cody, chairman, Revenue Commissioners, believes the modernisation of PAYE to a real-time digital platform “represents an important step in the process of continuous improvement in service, compliance, and efficiency in our administration of the tax system”.

Mr. Cody agreed that while the new real-time PAYE system will deliver long-term efficiencies, “businesses, particularly those at the smaller end of the scale, will need some help to get there”.

Your local TaxAssist Accountant can help your business to navigate the new real-time PAYE landscape. Our network of professionals acknowledge that employment red tape can be intimidating and time-consuming. That’s why we offer to guide you through the key processes, costs, calculations, and deadlines, allowing you to focus on doing what you do best – running your business.

For a free initial consultation on the new PAYE system with your nearest TaxAssist Accountant, call us today on 1890 98 76 09, or drop us a line using our online enquiry form

Last updated: 2nd May 2024