The webinar discusses how PAYE modernisation will impact employers and employees by streamlining payroll processes through real-time data submissions, resulting in more accurate tax credit allocations. Employers will no longer submit annual P35 forms but rather provide updates via a 'mini P35' each pay period, automating tax credits and reducing administrative burdens. Potential downsides include the need for reliable internet access and the necessity for employers to invest in compatible payroll software.

1. 1/25/18
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The webinar will begin shortly….
How will PAYE Modernisation affect
your payroll bureau?
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The Panel…
Paul Byrne
Managing Director at
Thesaurus Software
Former Accountant
in Practice
Sandra Clarke
Partner at
BCC Accountants
Council Member of the
Irish Tax Institute
Sinead Sweeney
PAYE Modernisation
Change Manager
Revenue
Commissioners
Webinar Agenda…
An introduction
to PAYE
Modernisation
What direct effect
will this have on
employers?
What direct effect
will this have on
employees?
What are
the possible
downsides for
employers?
Revenue’s
delivery
schedule
The rollout of PAYE
Modernisation in
the UK
Processing
manually or using
payroll software?
The letter of
engagement
How will PAYE
Modernisation
affect your payroll
service?
Communicating
these changes to
your clients
Part 1: How will PAYE Modernisation affect your payroll bureau?
Part 2: Revenue Presentation
Questions and Answers

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--An Introduction to PAYE Modernisation
What is PAYE Modernisation?
• Many employees are given the wrong tax credits and cut-off points
• Why? Revenue only gets payroll data at the end of each year (P35)
• Revenue will know where the employee is working and how much
they are earning in real time
• This allows Revenue to allocate the correct credits, avoiding
overpayments / underpayments of tax
What is PAYE Modernisation?
• Employers not operating PAYE correctly – new employees not
registered & out of date tax credits being used
• With PAYE Modernisation, a file will be submitted electronically to
Revenue on or before or shortly after each pay run
• Retrieval of tax credits will be automated – ensuring the correct
credits are being used
No more ‘P’ forms
• P60s
• P45s and P46s
• P35s
• P30s

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The file specifications…
• RPN – Revenue Payroll Notification – used to retrieve tax credits
and cut off points for new and existing employees
• http://bit.ly/2Bb1UEp
• PSR – Payroll Submission Request (Mini P35) – used to submit
payroll data to Revenue each pay period
• http://bit.ly/2FN5xUA
The file specifications…
• RPN Data Items:
1. Illness Benefit
• Illness Benefit will not be included due to data protection concerns
• Tax credits and cut off points will be adjusted by Revenue for any taxable
Illness Benefit
• Payroll operators will no longer need to worry about taxing Illness Benefit
• This change applies from 1st
January 2018
The file specifications…
• RPN Data Items:
2. Employment ID
• Only relevant for those employees who have multiple employments with
the same employer, and those employees who cease with an employer
and are then re-employed by the same employer in the same tax year
• Distinguishes employments from each other so as to ensure that the
employee’s tax credits and cut offs are allocated correctly
• Payroll software will handle this in the background
The file specifications…
• PSR Data Items:
1. RPN Number
• The RPN response will have an RPN number, which will also be included in
the periodic PSR
• The RPN number in the PSR will show Revenue that the employer is
applying the correct tax credits and cut offs for the employees.

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The file specifications…
• PSR Data Items:
2. Gross Medical Insurance paid by employer
• The current P35 spec looks for the amount of medical insurance eligible
for tax relief, which must be obtained from the medical insurance provider
• The PSR specification is only looking for the actual amount paid by the
employer (the amount BIKable)
The file specifications…
• PSR Data Items:
3. Expected number of pay periods in a full year
• From 2019, the software and employer will need to know from the start
of the year how many pay days there are
• If there are 53, then the year’s tax credits and cut offs may be spread
over the 53 weeks
• Additional €100 million for the government???
-a) Revenue Payroll Number
b) Real-time Payment Notice
c) Revenue Payroll Notification
What does RPN stand for?
-a) Revenue Payroll Number
b) Real-time Payment Notice
c) Revenue Payroll Notification
What does RPN stand for?

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What direct effect will this
have on employers?
• Instead of a yearly P35, there will be a “mini P35” submitted with
each payroll run
• Checking for updated tax credits and cut off points will also be an
integral part of each payroll run
• Details of employees starting and employees leaving will be
included in the “mini P35”
What direct effect will this have on employers?
• Businesses across Ireland have broadly welcomed PAYE
Modernisation
• Streamline business processes and reduce administrative cost
for employers
What direct effect will this have on employers?
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What direct effect will this
have on employees?

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• Employees will be able to log in to Revenue (MyAccount) and view
what has been submitted, in relation to them, by the employer
• Employees will be able to allocate their credits and cut offs
between multiple employments
• Revenue can be informed of changes in employment
• At the year end, employees will be able to view and print their
official certificate of earnings and deductions
What direct effect will this have on employees?
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What are the possible downsides
for employers?
• Administrative burden?
• Limited access to internet connection
• Employers should invest in a payroll solution that will cater for
PAYE Modernisation
• The time saving benefits of payroll software should outweigh the
financial investment
Possible downsides? APIs and how they help…
• API: Application Programming Interface
• Enables different software applications to communicate with each
other, resulting in a better user experience
• Current system of retrieving tax credits (P2Cs) – manual process
with a number of steps

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APIs and how they help…
• With the API, tax credit retrieval will require just one click
• Periodic payroll submissions (Mini P35) will also be a one click
process
• Overall, the actual workload required each pay period should be
reduced
APIs and how they help…
Enter details of new employees in to the payroll
Enter pay, hours and deductions for all employees
Retrieve latest P2C information – API
Process and finalise payroll
Submit file to Revenue - API
Distribute payslips and pay employees
-Current Development Timetable
Current Development Timetable
• File specifications were agreed and published for:
• P2C request (now called RPN – Revenue Payroll Notification)
• Payroll Submission Request (i.e. the mini P35)

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Current Development Timetable
• Next step: test environment which will allow Revenue and
Developers to test file submissions
• As developers, software changes need to be finished before next
Budget
• After this, the focus will be on changes as a result of the 2019 Budget
• Early 2019 – old and new systems will overlap as 2018 P35s will still
need to be submitted
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The Rollout of PAYE
Modernisation in the UK
BrightPay UK Demo…
Retrieval of coding notices (RPN)
Finalise the payroll
Submit an FPS & receive a response (PSR) – mini P35
-Submission Deadlines and Corrections

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Submission Deadlines and Corrections
• In the UK, the periodic data submission must be submitted on or
before the actual pay day
• In Ireland, the recent Finance Act specified that the periodic data
submission will also be required on or before the actual pay date
• Best practice – submit after finalising each payroll
Submission Deadlines and Corrections
• Problematic clients – re-train these clients now!!!
• If the correction means that more tax is payable for a previous tax
month, Revenue can apply interest
• A correction after the month’s close off or sign off date will be
seen as a change to a statutory declaration
• Consistent corrections or late submissions may result in corrective
action by Revenue
Submission Deadlines and Corrections
• Corrections are dealt with on the basis of “follow the money”
• If an employee is over or underpaid in a period and their pay is
adjusted in the next period to correct this, no correction
submission is required
• If an employee is paid an amount different to what it says in the
payroll, then a correction submission will subsequently be required
Data Alignment & Disputed Liabilities
• Data Alignment: 2018 Payroll software will prepare a return for
submitting electronically to Revenue so that Revenue will have
accurate information for the start of 2019
• Disputed Liabilities: One of the main difficulties with the UK system
is reconciling differences between HMRC and payroll systems
• Revenue will have a facility to perform a reconciliation between
both sets of data

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Processing Manually or using
Payroll Software?
Manual payroll processing…
208,000
Irish Employers
60,000
Calculate manually
• Need to log in to ROS and enter all details for all employees
• Need to manually check for and process changes to tax credits/cut offs
• Quite time consuming & prone to error
• Payroll bureau or payroll software? Potential for new business
-Communicating with Clients
Factors that will impact disorganised clients
• Employees will expect to see most recent payments in their
MyAccount
• Late submissions will lead to the risk of penalties and fines
• A constant pattern of correction submissions will give rise to
interest and/or penalties
• Revenue will know when RPN checking and processing is not
happening

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The Letter of Engagement…
• Set out in your letter of engagement who is responsible for what
• Clients that keep giving you the wrong information or keep
providing the information late
• Inform these clients that any interest that Revenue charges or
that any additional fees that you need to charge will be part of
the new reality
The Letter of Engagement…
1. What exactly are your services and the deadlines by which
time you must be provided with payroll information
2. Your fees for this service
3. What happens when information is incorrect or not provided
in time for the deadlines
4. The method of calculating your additional fees in the event of
number 3
The Letter of Engagement…
5. How the accuracy and timeliness of the payroll is ultimately
the responsibility of the client and that your role is to
calculate, process and submit returns, using the information
provided by the client
Bureau processing – recommended for 2019
Request payroll details (hours, new employees, etc.)
- log and timestamp request
- log and timestamp response
Enter details of new employees in to the payroll
Enter pay, hours and deductions for all employees
Retrieve latest tax credits and cut offs (API)
Process payroll
Communicate payroll preview to client before finalising
- log and timestamp payroll preview communication
- log and timestamp client approval
Finalise payroll
Submit file to Revenue (API)
Distribute payslips and pay employees

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How will PAYE Modernisation
affect your payroll service?
Impact on Payroll Bureaus
• Elimination of ‘P’ forms and end of year returns, reducing your
workload
• Time savings due to seamless integration with payroll software
• Problematic clients – re-train these clients now!
What you need to do next…
Check that your payroll will be able to handle the change
Educate your clients
Review your letters of engagement
Review your fees
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Sinead Sweeney
PAYE Modernisation Change Manager
at Revenue Commissioners
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--Questions & Answers