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Revenue to scrap P60 and P45 forms in bid to modernise PAYE system

The details of the new PAYE system were outlined in Revenue’s annual report published today.

Revenue's current P45 form
Revenue's current P45 form
Image: Revenue

REVENUE HAS ANNOUNCED plans to scrap the traditional P60 and P45 forms.

In its latest annual report published today, Revenue outlined its new modernised approach to the Pay As You Earn (PAYE) tax system.

For employers, the new system changes current end-of-year reporting practices and employers will, from 1 January 2019, be required to report payroll data to Revenue each pay period.

Employees will be able to view all the data employers report to Revenue on their behalf.

The start of real-time PAYE reporting from 1 January 2019 will also eliminate the need for the P30, P45 and P60 forms, along with end-of-year returns.

A P60 is a certificate of an employee’s annual pay and deductions. A P45 is a statement of an employee’s pay and deductions for the year up to the date they leave their employment.

Revenue says it will ensure that ongoing employee tax deductions and contributions are correct.

Niall Cody, Revenue chairperson, said the most to real-time PAYE “represents an important step in the process of continuous improvement in service, compliance and efficiency in our administration of the tax system”.

Revenue tax collections

Revenue collected €50.76 billion in taxes, duties and levies this year, the annual report outlined.

Taxes on income rose by 4% last year, while VAT rose by 7% and corporation tax rose by 11%.

Revenue also said it saw continuing high voluntary compliance rates of over 90% across all taxes.

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Cody said Revenue saw a 13% reduction in debt available for collection.

He said that Revenue intervenes early when tax payment and filing obligations are not met and it has facilitated more than 10,000 taxpayers, who had temporary payment problems, with instalment arrangements worth €94 million.

Reporting that during 2017 Revenue collected €212.4 million in over 37,000 debt enforcement cases, Cody said that “the small minority who either refuse to engage with us or refuse to pay their tax are met with determined enforcement and collection action, and the additional cost of that action”.

In relation to its action against drugs, fiscal fraud and smuggling, Cody said Revenue seized €81 million worth of illegal drugs, alcohol and tobacco products.

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