Ardbrook - Irish Payroll and Payments Blog

Budget 2012 - USC Changes

2011-12-07T08:18:00.000Z

From 2012 the USC exemption limit will be raised from €4,004 to €10,036 per annum. The other major change to the calculation of the Universal Social Charge is that it will now be calculated on a cumulative basis removing the need for refunds at the end of the tax year.

Budget 2012 - Employer PRSI Calculation Change

2011-12-07T08:15:00.001Z

Budget 2011 abolished PRSI relief in the case of the employee element of PRSI in relation to the employee pension contributions and provided for the abolition of half of the PRSI relief in the case of the employer element of PRSI. In Budget 2012 the relief from employer PRSI on employee pension contributions is now fully abolished. This means that employer PRSI will increase for any employee who makes a pension contribution.

There are no changes in 2012 to the PRSI thresholds and rates.

Budget 2012 - The Highlights

2011-12-07T08:09:00.000Z

The main points as regards taxation of Budget 2012 are as follows

12.5% corporation tax rate remains cornerstone of economic policy
Introduction of Special Assignee Relief Programme
Enhancement of R&D tax credit regime targeted at SME’s
Removal of Employer PRSI relief on pension contributions
Increase in standard rate of VAT from 21% to 23%
No change in income tax rates, bands, or credits
No increase in employee PRSI or USC
USC exemption level rises to €10,036 from €4,004 in 2011
Increase in CGT, CAT and DIRT rates to 30%
Stamp duty on non-residential property reduced to 2%
Sick Pay Tax Exemptions changed
PRSI may widen to include rental income

Government Announce €3.8bn in cuts and tax increases in Budget 2012

2011-11-05T06:21:00.002Z

The Government announced on Friday that spending cuts and tax increases totalling €3.8 billion will be introduced in Decembers budget. €1.6bn will be in the form of tax increases, however the Minister for Finance Michael Noonan has stated that there will be no changes to income tax rates, bands or credits next year, with revenues coming from other sources. Changes to the VAT rate, property charges including the €100 household charge and carbon charges were possible areas for taxation, the Minster said yesterday.

Upcoming Budget Changes - Budget 2012

2011-11-03T08:57:00.000Z

After a meeting with Revenue earlier this week, updating of the EuroPayX and PayDay payroll software is proceeding. Incorporating all the amendments due to the change in the calculation of Universal Social Charge to cumulative basis from week one. This not only means changes to the calculation of Universal Social Charge but also to the following:

P60 will now show Universal Social Charge details, negating the requirement to produce a year end USC certificate.
The P2C Tax Credit import is being modified to import the extra cumulative information for USC
P45's will now also include USC cumulative information, also it will no longer be possible to return a P45 for any employee without a PPS number.
Numerious other changes to screens and reports within the payroll software

As more information becomes available updates will be posted.

Budget Day 2012 Announced

2011-10-20T12:42:00.000+01:00

It has been announced that the Irish Budget 2012 will be on Tuesday 6th December 2011.

Change to calculation of Universal Social Charge from 2012 Announced

2011-10-11T15:35:00.000+01:00

Revenue today announced a change in the method of calculation of the Universal Social Charge. From January 2012 it will be calculated on a cumulative basis as per PAYE. USC thresholds will be managed in the same way as Cut-off points are for PAYE. Follow the link below for further information

http://www.revenue.ie/en/practitioner/ebrief/2011/no-542011.html

PRSI Refunds - Share based Remuneration/PRSA's

2011-08-23T11:38:00.001+01:00

This sets out the arrangements for refund of PRSI paid on certain share-based remuneration. These arrangements may also be availed of in respect of PRSI incorrectly deducted and remitted in the 2011 tax year, on employer contributions to their employees’ Personal Retirement Savings Accounts (PRSAs).

SHARE-BASED REMUNERATION – EMPLOYER PRSI

As set out in the Minister for Social Protection’s statement of 23 August 2011, employers should cease deducting and remitting employer PRSI on share-based remuneration with immediate effect. Where employer PRSI on share-based remuneration has been deducted and remitted since 1 January 2011, a refund of PRSI may now be due.

SHARE BASED-REMUNERATION – EMPLOYEE PRSI

On 18 March 2011 the Minister for Finance announced that the charge to PRSI (both employer and employee) will not apply where the share-based remuneration was the subject of a written agreement, entered into between the employer and the employee before 1 January 2011. Therefore, employee PRSI paid on such share-based remuneration may be refunded. It should be noted that the Minister for Finance has indicated that the charge of employee PRSI will apply to all share-based remuneration from the 2012 tax year regardless of when agreements were entered into (with the exception of shares already held in an Employee Share Ownership Trust before 1 January 2011).
The appropriate legislative changes will be included in the next Social Welfare Bill.

PERSONAL RETIREMENT SAVINGS ACCOUNTS (PRSAs)

An employer's contribution to an employee's PRSA is not subject to PRSI. Clarification on the income tax, PRSI and universal social charge treatment of such contributions can be found in Revenue ebrief no. 36/11 published on 24 June 2011 at http://nt1/exchweb/bin/redir.asp?URL=http://www.revenue.ie/. Where PRSI has been incorrectly deducted and remitted in the 2011 tax year a refund of such PRSI may be due.
To facilitate the refund of PRSI within the 2011 tax year, it has been agreed with the Office of the Revenue Commissioners that employers can offset PRSI to be refunded against current PRSI liability through the monthly P30 /end of year P35 returns.

REFUND VIA P30/P35 RETURN TO REVENUE COMMISSIONERS

As the amount of PRSI chargeable is assessed on a weekly non-cumulative basis, the calculation of the amount of any refund should be made on a week-by-week basis.

P30 Return

PRSI is generally remitted with the form P30 to the Collector-General within 14 days of the end of the income tax month (or 23 days in the case of returns made through ROS) during which the deductions were made. Some employers may be authorised to make quarterly returns.
The total PRSI refund calculated should be deducted from the next monthly/quarterly P30 remittance of PRSI to be paid to the Collector-General and recording of the PRSI on the P30 should be reduced accordingly. Where the amount of the PRSI refund exceeds the amount of the monthly/quarterly PRSI liability to be remitted with the P30, a "nil" return for PRSI on the P30 should be recorded for that particular month/quarterly period. The excess of the PRSI refund not already offset against the PRSI liability in the first month/quarterly period may be offset in P30 returns for subsequent tax months/quarterly periods within the 2011 tax year.

P35 Return

Any excess of PRSI not recovered by adjustment to P30s before the end of 2011 can be claimed on the P35 return submitted at the end of the year. Please note that any such refund arising must be claimed at the appropriate section of the P35 return.
Under no circumstances should a refund of PRSI be recovered from income tax or universal social charge liabilities. Such liabilities should at all times be recorded separately from the PRSI contributions.
Employers should retain records showing how any refund was calculated for the usual 6-year period from the end of the tax year to which they relate.
Employers must also ensure that the correct PRSI class continues to be recorded for each employee, even though a “nil” or reduced PRSI liability is recorded on the monthly P30 submitted to the Collector General for the purposes of securing the refund of PRSI (and on the end of year P35 submitted in due course).
Employers can avail of the mechanisms outlined above to obtain a refund in all cases other than the circumstances listed in the Paragraph 3.

EXCLUSIONS FROM P30/P35 REFUND ARRANGEMENTS

The refund mechanism outlined in paragraph 2 above may not be used in the following circumstances:

Employer/employee PRSI paid prior to 2011
In respect of employees who are no longer employed by the employer
In respect of current employees whose employment in the period from 1 January 2011 to date has been interrupted for any period whatsoever.
In respect of employees whose income for the purposes of charging PRSI is less than €38 in any particular week from 1 January 2011 to date. This includes employees whose income for PRSI purposes was less than €38(see note below) for even one week of insurable employment during the period in question.

(Note: For those paid fortnightly or monthly the relevant figure is €76 and €165 respectively, provided the total earnings in each week of the fortnight or month are at least €38.)
Applications for refunds of PRSI in these circumstances must be made directly to the Department of Social Protection at:
PRSI Refunds Section
Department of Social Protection
Oisin House
212-213 Pearse Street
Dublin 2.
Applications for refunds cannot be made earlier than the last day of the contribution year in respect of which the contributions were made.

Press Release on SHARE BASED REMUNERATION

2011-08-23T11:02:00.002+01:00

The Minister for Social Protection, Joan Burton T.D., today (23^rd August) announced that employers should cease deducting and remitting employer PRSI on share-based remuneration, with immediate effect. The previous Government imposed employer and employee PRSI on all share-based remuneration. As part of this Government’s Jobs Initiative announced in May of this year, it was decided to abolish the employer element of PRSI on share-based remuneration entirely. This decision recognises that this charge on employers needlessly increased the costs of doing business in Ireland and has the potential to negatively affect current employment levels and future investment decisions. As some employers may have continued to deduct employer PRSI on share-based remuneration, it has been agreed, in consultation with the Minister for Finance, to provide this clear indication of the Government’s commitment to alleviating the unnecessary costs to employers.

As a transitional arrangement the Minister for Finance issued notice on the 18^thof March 2011 that the charge to PRSI on share-based remuneration would not apply where it was the subject of a written agreement, entered into between the employer and the employee before 1 January 2011. Notwithstanding this notice, the Minister for Finance has now clarified that the employee PRSI charge will apply to all share-based remuneration from the 2012 tax year. Therefore, regardless of when agreements were entered into, from 1 January 2012, the employee PRSI charge will apply in all cases with the exception of shares already held in an Employee Share Ownership Trust before 1 January 2011. This will ensure equity between pre January 2011 written agreements, which award shares on a once-off basis and those of a multi-annual or ongoing nature. By signaling in advance the cessation of this transitional concession, employers will have the opportunity to fulfill any pre-existing commitments in relation to share-based remuneration before the end of 2011.

To facilitate the refund of PRSI paid on share-based remuneration within the 2011 tax year, it has been agreed with the Office of the Revenue Commissioners that PRSI to be refunded can be offset against current PRSI liabilities through the monthly P30/end of year P35 returns. Such refunds may arise in relation to employer PRSI and to employee PRSI where a written agreement was in place before 1 January 2011. Details of the conditions for and method of availing of the offset of PRSI are provided in a Notice on PRSI Refunds issued by my Department today.

Legislative measures to give effect to these changes will be included in the next Social Welfare Bill.

Latest News on Share Option Schemes

2011-07-12T14:10:00.001+01:00

During a meeting this morning with the Department of Social Protection it has been stated that the law has yet to be enacted to change the way share option schemes are calculated. This means that for the present share option schemes should be calculated with employers PRSI where applicable and that no refunds may made.

The Department of Social Protection (DSP) remind everyone of the following with respect to Share-based Remuneration.

1 The regulations to cater for the changes announced in March 2011, whereby schemes that were signed off between an employee and employer prior to 1 January 2011 are exempt from EE & ER PRSI and the May 2011 announcement whereby schemes signed off between employee and employer after 1 January 2011 are now subject to EE PRSI and exempt from ER PRSI, have yet to amended.

2 As the regulations have not yet been amended the rules that pertained at 1 January still apply. ie all schemes whether pre or post 1 January 2011 are subject to both EE and ER PRSI

3 As the regulations of 1 January still apply no refund arises and therefore no refund may be reclaimed.

However, revised regulations are currently being worked on and will be become law as soon as the relevant Minster signs them. The new regulations will give effect to:

1 Where share-based remuneration is based on a written agreement entered into between employer and employee prior to 1 January 2011, such income will be exempt from both EE and ER PRSI

2 Where share-based remuneration is based on a written agreement entered into between employer and employee on or after 1 January 2011, such income will be subject to EE PRSI but exempt from ER PRSI

3 Will allow for

a. Refunds of EE and ER PRSI on schemes entered into before 1 January 2011

b. Refunds of ER PRSI on schemes entered into on or after 1 January 2011

The Department has indicated that they intend to publish a document regarding refunds for Share-based Remuneration in conjunction with the revised regulations when signed off.

With respect to PRSI refunds that may be due on ER PRSA contributions, the DSP has indicated that a document will be published addressing the issues within the next couple of weeks, This document needs to be approved by DSP, Revenue, The Collector General and Finance prior to its publication and distribution. This is also the case for the documentation with respect to Share-based Remuneration.

DSP are aware of the issues facing both developers and users of Payroll Software, but state that getting agreement from all relevant State bodies will take time.

Irish Payroll (A History of PAYE)

2011-07-08T09:13:00.000+01:00

Pay As You Earn (PAYE) is the name given to the income tax system for employees in Ireland and was introduced on 6 October, 1960.The evolution of PAYE over the past 50 years is also the history of Irish payroll systems from paper to computers.

Devised by Sir Paul Chambers, PAYE was introduced into the UK in 1944 following trials in 1940 and 1941. The financial strain that the Second World War placed upon the UK meant that it needed to collect more tax from more people.

PAYE in Ireland applies to earnings of all kinds arising from employment, including bonuses, overtime
and non-cash payments known as Notional Pay or Benefit-In-Kind (BIK).

PAYE operates by facilitating an employer to pay the tax due on your income to Revenue as you earn it. So, when you receive your pay at the end of a pay period, the tax deducted from it is due to be paid by your employer by the 14th of the month following the end of the calendar month in which the pay period occurred.
The reason why the tax year from 1960 through to 2001 commenced on the 6th April is a hangover from the 16th century when Pope Gregory decided that both the legal and Church year should finish on the 5th April.
The UK is the only country still operating this system once Ireland moved to a calendar year basis in 2002.
The amount of PAYE was based on a Certificate of Tax Allowances provided by Revenue to employers from Oct 1960 to April 2001. From April 2001 the amount of PAYE was based on a new system of Tax Credits instead of Tax Allowances.

The 2001 tax year was a short year of 38 weeks to finish on 31st December, 2001. This was to facilitate the introduction of the tax year on a calendar basis starting on 1st January, 2002. Also the 1st January, 2002 saw the introduction of the euro in place of the Irish punt.

In the early days of PAYE and payroll, calculations were done manually on paper 3 in 1 systems and on Tax Deduction cards provided by Revenue. During the 60s as the cost of computers and calculation machines became affordable larger companies started to use comptometers (which were manual action) to perform each arithmetic operation, then to paper tape and punched card accounting machines and then to stored-program computers.

Since the early 80s with the introduction of the Personal Computer (PC) almost every company in Ireland now run or have their payrolls run their payrolls on PCs. With the take-off of the internet in the 90s a lot of payroll activities now take place on the web. The filing of P35s with the Revenue Online System (ROS) and the take-off of cloud computing will continue the evolution of Irish payroll.

Latest PRSI Notes

2011-06-30T10:23:00.000+01:00

For details on the operation of PRSI from 2nd July 2011, please consult the Department of Social Protection (DSP) website at http://www.welfare.ie/ and in particular the Advanced Notice of PRSI Rates at http://www.welfare.ie/EN/Publications/Advance_jul2011/Documents/anprsi2011_july.pdf

SEPA (Single Euro Payments Area) Ready Software from Ardbrook

2011-05-31T07:52:00.000+01:00

The first thing to say is that Ardbrook software is SEPA ready. So, if you want to move today from your current EMTS payments to SEPA payments we can help with the transition.

What is SEPA?

The Single Euro Payments Area (SEPA) is made up of all the EU member states, as well as Iceland, Norway, Switzerland and Liechtenstein. It is an area in which you can make and receive payments in euro, under the same basic conditions, rights and obligations, regardless of their location, whether within or across national boundaries.

The consumer will be the major beneficiary of SEPA, which will offer greater choice of service, competition and flexibility. A consumer wishing to pay for services within any of the European countries involved in SEPA, (i.e. utility bills or maintenance on property abroad, etc.), may now do so using one domestic bank account, eliminating the need to open a separate overseas account. It also means that people who live, work or study outside their own country may use their account in their home country to complete all their transactions.

Customers will also be able to use the same payment card for all euro payments within the participating countries making the use of cards more efficient. The primary aim of SEPA is to enhance the provision of all electronic payment services to the customer - this will open up the market to services such as e-invoicing, e-ticketing, mobile and internet payment initiatives, etc., all designed to make the payment process less time-consuming and simpler for the customer.

The migration of bank customers from the current Electronic Money Transfer System (EMTS) format to the SEPA format has started as you will notice the terms BIC and IBAN appearing on invoices etc. in place of the existing sort code and account number. For SEPA to be successful it needs the European Commission, the European Central Bank and the Irish government to create the right conditions.

The European Payments Council (EPC) is the banking co-ordination body in relation to payments. The EPC has delivered the necessary SEPA payment schemes and frameworks to build the integrated euro payments market (SEPA Credit Transfer, SEPA Direct Debit and the SEPA Cards Framework).

On 1st November, 2009 the Payment Services Directive (PSD) was enacted in Ireland and throughout the EU. This Directive ensures that the same legal framework applies to all payments made within Europe whereby businesses and consumers can make payments easily, cost-effectively and efficiently. The PSD establishes the necessary legal framework for SEPA payments and also applies to existing national payment products. The PSD was enacted in Ireland as the European Communities (Payment Services) Regulations 2009.
SEPA will provide a simple and cost-efficient way to collect funds using a single payment instrument across European countries. SEPA will also provide the certainty of payment completion within a pre-determined time cycle, as well a straight forward reconciliation of payments received.

SEPA will also provide the ability to automate exception handling for events such as returned, rejected or refunded collections and reversals.

The introduction of the ISO 20022 XML message standards - the SEPA data format - should significantly reduce the costs currently associated with the maintenance of different national payment formats and related IT standards, including system administration.

Parking Levy Shelved

2011-05-30T09:37:00.000+01:00

It has been reported in the Irish Independent that plans to charge employees €200 for parking their car at their workplace have been shelved. According the Independent a goverment source said "It's definitely been put on the back burner now. In fact, I can't see it coming in at all.

Jobs Initiative

2011-05-11T09:46:00.001+01:00

The Irish Minister for Finance, Michael Noonan, introduced a Jobs Initiative yesterday, designed to improve Irish economic competiveness and stimulate job creation. The Jobs Initiative included a number of measures dealing with business and employment taxes, including:

Commitment to keeping the 12.5% Corporation Tax Rate
Abolition of Employer’s PRSI charge on share based remuneration
Temporary halving of the lower rate of Employer’s PRSI
Amendment of the R&D tax credit regime to enhance flexibility in how companies can account for the credit
Introduction of a new lower rate of VAT of 9% in respect of tourism-related services
Air Travel Tax reduced to zero

The measures introduced in the Jobs Initiative have to be self-funding, and as widely flagged, the Minister has introduced a temporary levy of 0.6% on the capital value of pension funds to fund the above measures.

Employer’s PRSI

The application of Employer’s PRSI on share based remuneration, which was introduced by Finance Act 2011, has now been reversed. The Employer’s PRSI charge on such remuneration will be abolished, the change being effective from 1 January 2011.

It appears that the 4% Employee PRSI charge will remain, but it is assumed that this will only apply to share based remuneration which are not evidenced by a written agreement predating 1 January 2011, as previously announced.

The lower 8.5% Employer’s PRSI rate will be halved to 4.25% for employees earning less than €356 per week with effect from 1 July 2011. This provision is expected to apply until 31 December 2013.

The Minister also announced the retention of the existing Employer Job (PRSI) Incentive Scheme until the end of 2011. This provides for a 12 month employer PRSI exemption in respect of qualifying new positions which are filled by qualifying new employees during the 2010 calendar year.

Revised USC Frequently Asked Questions

2011-03-30T08:57:00.001+01:00

Revised USC FAQs dated 15th March 2011 have been published on the Revenue website at www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf

Annual membership fees of a professional body

2011-03-30T08:49:00.000+01:00

Finance Act 2011 – change to section 118(5E) Taxes Consolidation Act 1997

For the tax years 2004 to 2010, Section 118(5E) TCA 1997 provided that expenses incurred by an employer on behalf of an employee in connection with the payment (or reimbursement) of annual membership fees of a professional body were exempt from tax where such membership was regarded as “relevant to the business” of the employer.

Following the enactment of Section 7 of the Finance Act 2011, this tax exemption is not available for the tax year 2011 and subsequent tax years. Accordingly, the deductions of tax, PRSI and the Universal Social Charge (USC) must, subject to paragraph 3 below, be made from pay in respect of the notional income amount of any payment or reimbursement by the employer of membership fees of a professional body on behalf of an employee.

Arising from the enactment of Section 7 of the Finance Act 2011, Revenue has been asked to clarify:
the extent to which a deduction may be available to employees under the general rule governing employee expenses (Section 114 TCA 1997) in respect of annual membership fees paid to a professional body; and
the extent to which, for ease of administration, employers need not make tax, PRSI and USC deductions where such professional membership fees paid by the employer on behalf of the employee would in any event be allowed as a deduction under section 114 TCA 1997.

Tax deductibility of employee expenses – Section 114 TCA 1997

In addition to expenses of travel, Section 114 TCA 1997 provides for a tax deduction in respect of expenses incurred wholly, exclusively and necessarily by an individual in the performance of the duties of his or her employment. In the context of annual membership fees of a professional body, whilst each case is examined on its own facts and circumstances, Revenue will operate in accordance with the following guidance for the tax year 2011 and subsequent years.

Where there is a statutory requirement for membership of a professional body etc.

In some instances, individuals are required by statute to be registered members of a designated professional body, association, society, council, etc. before they can carry out the duties of their employment. Under long standing practice, a deduction under Section 114 TCA 1997 is allowed in respect of the annual registration or membership fees in such instances.

In other instances, a statutory provision may provide that an individual registered with, or a member of, a professional body, association, society, council, etc, has a right, by virtue of such registration or membership, to plead or be heard in representing a client of his or her employer before a court or tribunal. Under long standing practice, a deduction under Section 114 TCA 1997 is allowed in respect of the annual registration or membership fees in such instances provided the duties of the employment require the individual to appear and plead before a tribunal.

Where there is a requirement for a practising certificate or licence

In some instances, outside of a specific statutory requirement, individuals are obliged to have a current practising certificate or licence issued by a professional body, association, society, council etc. before they can carry out the duties of their employment. Again, under long standing practice, an income tax deduction is allowed in respect of both the annual membership fees payable to such body, association, etc. and in respect of the cost of the practising certificate or licence where there is a requirement of that body, association, etc. that an individual must hold a current practising certificate or licence issued by it before that individual can carry out the duties of his/her employment in respect of which the certificate or licence refers.

Other situations where membership fees of a professional body may be deductible

Apart from the foregoing, an income tax deduction under Section 114 TCA 1997 will be allowed in respect the annual membership fee payable by an employee to a professional body, association, society, council, etc. where -
a.the duties of the employee and the duties of the employment require the exercise or practice of the occupation or profession in respect of which the annual membership fee refers;
b.the employee so exercises or practices the occupation or profession in respect of which the annual membership fee refers; and
c.membership of the professional body is an indispensable condition of the tenure of the employment.

Operation of payroll deduction

The effect of Section 7 Finance Act 2011 is that the deductions of tax, PRSI and the USC must now be made from pay in respect of the notional income amount of any payment of membership fee of a professional body paid by an employer on behalf of an employee. However, for ease of administration and to avoid unnecessary claims under Section 114 TCA 1997, where –
an employer pays or reimburses a membership fee to a professional body on behalf of an employee; and
a deduction under Section 114 TCA 1997 would be available, deductions of tax, PRSI and USC need not be made from pay in respect of the notional income amount attributable to such annual membership or registration fee. Where such deductions are not made an employee is, of course, precluded from making a claim under Section 114 TCA 1997 in respect of such fees, etc.

Office holders (including directors)

The foregoing as regards annual membership fees, etc. applies to office holders in like manner as it applies to employees.

Examples

Example 1.

Lisa is an architect and is employed in that capacity. However, before Lisa can practice as an architect, there is a statutory requirement (under the Building Control Act 2007) to be registered with the Royal Institute of the Architects of Ireland in order to perform the duties of her employment and her employer pays her annual registration fee. In this instance, the appropriate deductions of tax, PRSI and the Universal Social Charge (hereinafter referred to as ‘appropriate deductions’) need not be made from her salary in respect of the notional income amount attributable to such annual registration fee.

Example 2.

Pauline is a health professional and is employed in that capacity. Under the Health and Social Care professionals Act 2005, Pauline is obliged to be registered with the Health and Social Care Professionals Council set up under that Act in order to perform the duties of her employment. Her employer pays her annual registration fee. In this instance, the appropriate deductions need not be made from her salary in respect of the notional income amount attributable to such annual registration fee.

Example 3.

Mary is an architect but is employed as a human resource manager. Mary’s employer pays her registration fee to the Royal Institute of the Architects of Ireland. In this instance, the appropriate deductions under the PAYE system must be made from her salary in respect of the notional income amount attributable to such annual registration fee.

Example 4.

John, a health professional, is employed on administrative duties. His employer deems it desirable (even though it is not essential for the performance of his duties) that he retains his membership with the relevant health professional body, council, etc. and pays his annual membership fee to such body, etc. In this instance, the appropriate deductions must be made from his salary in respect of the notional income amount attributable to such annual membership fee.

Example 5.

An accountancy practice employs Adrienne, an accountant, in that capacity. Her duties are the preparation and audit of accounts for clients. It is an indispensable condition of the tenure of her employment that she is a member of a recognised accountancy body. Adrienne’s employer pays her annual membership fee to the relevant professional body, association, society, council, etc. In this instance, the appropriate deductions need not be made from her salary in respect of the notional income amount attributable to such annual membership fee.

Example 6.

Helen, an accountant, is employed as an ‘in house’ accountant with responsibility for preparation of accounts and related matters. Under Helen’s employment contract it is an indispensable condition of the tenure of her employment that she be a member of a recognised accountancy body. Helen’s employer pays her annual membership fee to the relevant accountancy body. In this instance, the appropriate deductions need not be made from her salary in respect of the notional income amount attributable to such annual membership fee.

Example 7.

Philip is an accountant employed by an advertising firm as a marketing executive. His employer deems it desirable (even though it is not essential to the performance of his duties) that he retains his membership with the relevant accountancy professional body and pays his annual membership fee to such body. In this instance, the appropriate deductions must be made from his salary in respect of the notional income amount attributable to such annual membership fee.

Example 8.

Patrick is a tax consultant employed by an accounting firm. It is a condition of Patrick’s employment that he may be required to appear and plead on behalf of the firm’s clients before the Appeal Commissioners. Patrick’s employer pays his annual membership fee to one of the bodies recognised by statute as allowing its members an explicit right to be heard before the Appeal Commissioners. In this instance, the appropriate deductions need not be made from his salary in respect of the notional income amount attributable to such annual membership fee.

Example 9.

Audrey is a solicitor and is employed in that capacity in the public sector. It is an indispensable condition of the tenure of her employment that she is a member of the Law Society. Her employer pays her annual subscription to the Law society. In this instance, the appropriate deductions need not be made from her salary in respect of the notional income amount attributable to such annual membership fee.

Example 10.

A solicitor practice employs Olive, a solicitor, in that capacity. Olive cannot practice as a solicitor unless she is a member of the Law Society of Ireland Her employer pays her annual membership fee. In this instance, the appropriate deductions need not be made from Olive’s salary in respect of the notional income amount attributable to such annual membership fee.

Example 11.

Pamela is a solicitor but is employed as a continuity announcer by a radio station. Her employer pays Pamela’s relevant annual fees to the Law Society of Ireland. In this instance, the appropriate deductions must be made from her salary in respect of the notional income amount attributable to such annual membership fee.

Share-Based Remuneration - Finance Act 2011 Changes

2011-03-28T07:59:00.001+01:00

The Budget and Finance Act 2011 made several changes to share-based remuneration, in particular charging certain gains made by employees to universal social charge (USC) and to PRSI. These changes also impact on employers who are to be responsible for deduction and payment of most of the relevant charges.

Department of Finance statement on PRSI

The Department of Finance published a statement on its website (http://www.finance.gov.ie/) on 14 March 2011 in relation to the 'grandfathering' of the new PRSI provisions. This states that the charge to PRSI (both employer and employee) will not apply where share-based remuneration was the subject of a written agreement entered into between the employer and the employee before 1 January 2011. The new PRSI charges will, however, apply to share-based remuneration given under agreements entered into on or after 1 January 2011. The statement also states that the legislative changes required to underpin this clarification will be made in the next Social Welfare Bill. Accordingly, any PRSI already deducted by employers which falls within the terms of this arrangement may be recouped by adjustment to payroll in the current tax year. When making such adjustments, employers should avoid reducing pay to less than €38 in any PRSI week so that employee contribution records are not adversely affected by the adjustments.

Transitional arrangements for USC and PAYE

Regardless of when agreements were entered into, share-based remuneration (including share options) remains chargeable to USC from 1 January 2011. Likewise, the collection of income tax on share awards is brought into the PAYE system for the tax year 2011. Revenue and the Department of Social Protection recognise that some employers may need time to put appropriate structures in place and to adapt their payroll systems to these developments. They will not, therefore, as a transitional arrangement, seek to impose interest and penalties where any outstanding liabilities are settled before the P30 filing date for June, i.e.14 July 2011 or 23 July for ROS filers. This treatment will apply to income tax, USC and PRSI on share awards, to USC and PRSI on the exercise of SAYE share options and appropriations of shares in approved profit sharing schemes, and to PRSI on the exercise of non-SAYE share options.
Any amounts paid before these dates will not be refunded. Interest on late payment will be calculated from the actual due dates and not from the extended deadline where outstanding liabilities are not settled by that extended deadline.

USC and share option gains (RTSO)

Income tax on gains arising from the exercise of share options, known as 'relevant tax on share options' (RTSO) continues to be payable within 30 days of the exercise of an option and continues to remain outside of the PAYE collection system. Instead, the employee is responsible for payment of this tax, which should be paid when filing the Form RTSO1 (PDF, 50 KB) with the Collector-General. USC on such gains should also be paid within 30 days of the exercise of an option and be remitted with the form RTSO1. USC payable on gains made since 1 January 2011 should now be brought up to date by employees who have exercised options in this period.

EuroPayX - Irish Language P60's

2011-03-11T15:35:00.000Z

EuroPayX irish payroll package has now improved its support for the Irish language by including Irish Language versions of the P60 and Levy cert prints. This complements our already available Irish language payslip stationery. We would be insterested to hear any suggestions as to how to improve the Irish language support within EuroPayX, you can do so by making comments or by emailing us @ info@ardbrook.ie

New Programme for Government

2011-03-08T08:21:00.000Z

The programme for government of the new Fine Gael / Labour government has been published and contains some proposals that will effect taxation

Maintenance of Ireland’s 12.5% corporation tax rate
No increase in the standard 10.75% rate of Employers’ PRSI, and a reduction of 50% of the lower 8.5% rate up to the end of 2013 on jobs paying up to €356 per week
No further changes to income tax rates, bands or credits, and a review of the USC
Property tax reliefs and other shelters which benefit very high income earners will be reduced, capped or abolished
An acceptance of the EU/IMF bailout conditions for at least the next two years which could see the introduction of a property tax, water charges and changes in VAT

It remains to be seen if the Government will introduce a mini-budget in late May or early June to implement some of these changes.

Ardbrook Website given a Facelift!

2011-03-04T12:39:00.000Z

Ardbrook's website http://www.ardbrook.ie/ has been given a facelift! This, we hope, will make it easier to locate infomation regarding our irish payroll products and our electronic payments software. So if you find any problems on the new website, just post a comment below so that it can be corrected.

Changes to the operation of Relevant Contracts Tax (RCT)

2011-02-28T12:47:00.000Z

On Budget day, 7 December 2010, the Minister for Finance announced that significant reforms would be made to the Relevant Contracts Tax (RCT) scheme to enhance its effectiveness, reduce opportunities for fraud and help decrease the administrative burden for businesses and Revenue. The Finance Act (enacted on 6 February 2011) gives a legislative base to the reform of the RCT scheme. The provisions are contained in Section 20 of the Act. In essence, the Finance Act amends the Taxes Consolidation Act in Chapter 2 of Part 18 by inserting twenty-two new sections after Section 530. These sections comprise a new scheme of RCT, which will replace the current scheme on a date yet to be decided.
The key elements of the new scheme as outlined in the Act are:

Replacement of the current RCT rates of 0% and 35% with a three-rate withholding scheme:
- zero rate which will apply on the same basis as currently applies to a C2 holder - criteria include compliance with tax obligations for previous three years,
- standard, i.e. 20%, rate for subcontractors registered for tax with a record of substantial compliance,
- 35% rate which will be a default rate where both zero and 20% are not appropriate.
Abolition of the monthly RCTDC repayment system and replacement with an offset system and annual repayment.
Strengthening of the reporting system for RCT principals in order to enhance compliance and reduce the opportunities for fraud.
The mandatory use of electronic means for the transfer of information, data, payments and returns.

The following is an overview of how the new scheme is expected to work. It should be remembered that all contacts between the principal and Revenue will be through an on-line process.

When a principal enters into a relevant contract with a subcontractor, s/he will be obliged to provide Revenue with details of the subcontractor and contract, on-line, including confirmation that the contract being entered into is not a contract of employment. Revenue will then acknowledge the contact and will advise the principal and subcontractor of the rate to be applied, if available. (Section 530B 'Notification of contract by principal')
Prior to making a payment under the contract, the principal must notify Revenue (by electronic means) of their intention to make the payment and state the gross amount to be paid. (Section 530C 'Notification of relevant payment by principal')
Revenue will issue a deduction authorisation setting out the rate of tax and the amount of tax to be deducted from the payment. The principal must pay the subcontractor in accordance with the deduction authorisation and provide a copy of the authorisation to the subcontractor. (Sections 530D 'Deduction authorisation' and 530F 'Obligation on principals to deduct tax')
Revenue will automatically put credit for any tax deducted onto the subcontractor’s tax record. That credit will be available for offset as it arises or for repayment annually. (Section 530P 'Credit for deducted tax')
If the subcontractor is registered for ROS, they will be able to access their own records through ROS.
Revenue will have all details of the payments notified to them by principals. Depending on the filing frequency of the principal, a deduction summary will be issued to the principal, either monthly or quarterly, listing all of the payments Revenue has been made aware of. If the summary is correct, the principal needs only to arrange payment on or before the due date for the return. The return will be deemed to have been made on that date. If the summary requires amendment the principal can amend it on-line and arrange for payment on or before the due date. (Section 530K 'Return by principal')
Payment should be made on-line by the due date. As all principals will be electronic filers, the due date is the extended date – the 23rd day after the end of the period covered by the return. The compliant principal will then have fulfilled their obligations. (Section 530L 'Payment of tax by principal')
If the deduction summary is amended after the due date, the return will be late and a surcharge will apply. Revenue will issue a notice of the tax and any surcharge due. (Section 530M 'Late returns and amendments')
Revenue can assess the liability of a principal, normally following an investigation or audit. A notice of assessment will issue in such cases. (Section 530N 'Assessment by Revenue officer')

Revenue is currently working on the design of the new scheme, which will have an impact on the sectors where RCT applies i.e. Construction, Meat Processing and Forestry. To underpin the implementation of these major changes, Revenue is engaging with key stakeholders including the Tax Advisory Liaison Committee Sub Group on RCT set up for this purpose.

EuroPayX - Attach documents to Employee Records

2011-02-22T21:49:00.000Z

In our EuroPayX irish payroll product it is now possible to link related documents to an employees record. These documents can be in any format such as word, excel or pdf, they can even be scanned from source material enabling you to access an employees complete record from within your payroll software.

To link a document to an employee call up the employees record in the employee window and click on the HR tab. Then click the add document to select the document file to be linked to the employee. It is possible to display any document by double-clicking on its name.

Universal Social Charge (USC) Amendment

2011-02-21T20:23:00.000Z

As a result of the recent enactment of the 2011 Finance Act, there has been a significant change to the USC For an individual holding a current Full Medical Card the maximum rate of USC is now 4% instead of the previous 7%. The employer must satisfy themselves that the employee hold such a card before implementing the change. This change is backdated to 1 January 2011.

In cases where an employee holds a current Full Medical Card, and have paid USC at the 7% rate, that employee is entitled to a full refund immediately rather than waiting until the end of the tax year.

Please note that once an employee has held a Full Medical Card for any period during the course of current (2011) tax year the maximum rate of 4% applies for the full tax year, even if the employee loses the medical card during the year. Equally if an employee gains a full medical card, in June for example, then the maximum USC rate is 4% for the whole tax year and a refund maybe due depending on earnings.

Rates for individuals in possession of a Full Medical Card are as follows:

Income up to €10,036 (€193 per week or €837 per month) 2%
Income above €10,036 (€193 per week or €837 per month) 4%

These rates are the same as those applying to employees aged 70 and over.

For further details on the operation of the USC, please consult the Revenue website at ww.revenue.ie and in particular the USC FAQs (frequently asked Questions) at www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf The FAQs are being continually updated and are a required read.

USC & Full Medical Card

To make these changes in EuroPayX, the following steps are necessary for relevant employees:-

1 View Modify Employee Details or choose employee from left-hand panel

2 Open relevant Employee

3 Go to USC tab

4 Tick the new Full Medical Card check box

5 Save and Exit employee screen

The rest is automatic. Once this check box is turned on the maximum rate of USC applied to this employee will be 4% and on the next payroll calculation run, the employee will get a refund if one is due.

Special Contributors to PRSI

2011-02-21T20:20:00.000Z

Following consultations between the Revenue Commissioners and the Department of Social Protection (http://www.welfare.ie/EN/Topics/PRSI/Pages/specindex.aspx), it has been decided that PRSI should be returned through normal P30/P35 procedures in cases subject to PAYE Exclusion Orders. Heretofore, PRSI for these employees were remitted separately to the Special Collections Section in Waterford.

This change will simplify the current arrangements where employers must account for PRSI through the Special Collections System and for the Universal Social Charge through the P35 system.

This change is effective from the 2011 year.

The P30 screen within EuroPayX, [Payroll Run], [P30 Details], has separate tabs for both the normal

P30 and Special Contributors. From this point forward the P30 tab will show total monies due to the Revenue, including Special Contributors. In addition, as part of the next period update any figures currently appearing on the Special Contributors will be merged with the P30 screen and the Special Contributor Tab will be redundant.

Should you need to report separately on Special Contributors, ensure for relevant employees that on the Employer Master File, PRSI Tab that the Special Contributor check box is ticked.

Please note that the P30 report, P30 XML file for ROS and the P30 / P35 comparison, which is run as part of the period update have all been amended to reflect the new treatment of Special Contributors.

P35 Refunds and P35 Amendments

2011-02-03T07:53:00.000Z

P35 Refunds

To avoid delays in the processing of refunds that arise from the end of year P35 paper returns, taxpayers and their agents should note that:

A P35 refund can only be processed on the receipt of a valid claim. A valid claim should be made by entering the refund amount on the P35 declaration (line E) or by sending a claim to Revenue in writing for the amount of the refund due.
If line E on the P35 declaration is not completed where the declared liability is less than the amount paid, Revenue will not accept that a valid claim has been made. In such cases, the taxpayer will receive a letter advising of a discrepancy in their account. It is important that if there is a refund due it should be claimed in writing at this stage.
If a refund is not due and an amended return is required to balance the account, Revenue should be advised that an amended or supplementary return will be filed.

P35 Returns filed on ROS

To claim a refund using the ROS Online system, the "Net Refund Box" must be completed by the employer. The same applies when using the ROS Offline system and when uploading a file via a payroll system.
For zipped files, a "Pre-emptive declaration" screen is presented immediately before uploading the file which gives the employer the option to claim a refund in the event that an overpayment exists.

Time Limit

It is also important to note the strict time limit for making a valid claim for a P35 refund. Under Section 865 of the Taxes Consolidation Act 1997, the time limit for making a valid claim is four years from the end of the reference period. No refund can be made where a claim is made outside the time limit provided for in the legislation.

Interest on Refunds

Section 121 of the Finance Act 2007 provides for interest to be paid by Revenue where a valid claim for a refund is not processed within 93 days. It is vital that all the relevant information needed to support a valid claim is supplied to enable Revenue process valid claims within this 93 day time frame.

Refunds arising from Amendments to P35 Paper Returns

Taxpayers and their Agents who wish to amend P35 returns on paper are encouraged to use the P35 Amendment form available from the Employers' Helpline:
Phone: 1890 25 45 65 or 353 67 63400 or email p35helpline@revenue.ie Revenue Commissioners, St. Conlon's Road, Nenagh, Co. Tipperary.
If the amendment gives rise to a refund, the amount of the refund must be clearly shown and claimed on the relevant section of the form.

The use of the P35 Amendment form and the clear identification on the submission will facilitate the timely processing of the refund due.
If the amendment form is not used then any request to amend the Pay and Tax details for an employee must be in writing. Any refund arising from such an amendment must be clearly stated and claimed in letter form. Where the details for a number of employees need to be amended, then the total amount of any refund arising must be clearly shown and claimed.

For each amendment to an employee's details the following information will be required:

Name, PPS Number, Total Taxable Pay, Tax, Gross Pay, EE PRSI, Total PRSI, PRSI Class, Weeks Worked, and Medical Insurance paid by Employer.
In respect of 2009 and 2010, the Income Levy is also required.
In respect of 2011, the Universal Social Contribution will also be required.

All claims for refunds of P35 overpayments or requests for P35 Amendments should be addressed to:

P35 Processing Section,
Office of the Collector General,
Sarsfield House,
Francis Street,
Limerick.
Phone: 1890 20 30 70 Ext: 24897. Fax 069 24898.
Filing on ROS

Taxpayers and Agents registered for ROS should file any amendments to the P35 details on ROS where the original P35 and P35L were filed on ROS. The revised PAYE/ PRSI totals and any refund should be entered and claimed on the P35 declaration on ROS.
If any difficulty arises with filing or amending on ROS you should contact the Employers Helpline on 1890 25 45 65.

Useful points for Employers Agents when filing P35L's through ROS

When a P35 Declaration is being changed on ROS, it is important to note the following:
The Supplementary status should only be used when providing details for additional employees which were not included on the original return.
The Amended status should only be used when employee details, for employees previously submitted, are being changed.

Employers should try to include all employees under an Employer's registered number in the Original P35
The changes to the P35 Declaration should be adjusted by the same amounts, by which the P35 Listings are being adjusted.
The P35 Listings (and declaration) should be submitted on Paper or via the ROS system but not both.
It is only possible to change a P35L on ROS where the Original P35L has a valid & correct PPS number, and where the same PPS number is used on the Amended P35L.

Information Note on Amended and Supplementary P35s

For those making changes on the P35 after filing the initial details, it is important to note the difference between an Amended P35 and a Supplementary P35, regardless of the filing method used - i.e. paper or electronic format (ROS).

An Amended P35 should be filed when the employer wishes to adjust the PAYE/ PRSI details of employees who were already included on the original P35 return.
A Supplementary P35 should be filed only when additional employees, who were not listed on the original P35, are included. Care should be taken when filing an amended or supplementary return on ROS to ensure that the correct option is selected.
Supplementary P35's may be filed on paper by using the required P35L stationery and P35 declaration, which are also available from the Employers Helpline in Nenagh.

If you have any queries in connection with the content of this e-Brief, please contact Andrew Wiley at 069-24876.

Or you can contact P35 Overpayments Section by sending an e-mail to: p35processing@revenue.ie or telephone 069 - 24897.

New changes proposed to USC

2011-01-25T14:40:00.000Z

The minister for finance Mr Brian Lenihan has said that he will introduce the following changes to the implementation of the Universal Social Charge

Medical card holders will not have to pay USC at the top 7% rate only at the lower rates
The self-employed will pay an extra 3% surcharge on earnings over €100,000.00

We will post further details as they become available.

WORKING TIME ACT – TIME FOR A CHANGE?

2011-01-11T16:41:00.000Z

Working time legislation has been in place since 1997. The basic thrust of the regulations is that workers may not work more than an average of 48 hours a week, are entitled to daily and weekly rest periods, and to 4 weeks’ paid holiday. Of course, no legislation, particularly coming from Europe, is ever quite so simple. The average hours are calculated over a 4 month period; young workers can only work 40 hours a week, certain sectors of workers are excluded; and the definition of what constitutes work is open to disagreement.

Despite the regulations going to the heart of what every worker does with their time, and of how good or bad the regulations are, you might be forgiven for asking: "What regulations?" The Department of Enterprise, Trade and Innovation so far doesn’t seem to have demonstrated that it has teeth. If someone is in breach, what happens? At the moment most companies are not considering it to be a problem. It would appear that the regulations are not high on anyone’s priority list.

Our "48 Hours" software packeage gives the average hours worked in a seven day period over four months. This payroll data may be kept for as long as is deemed necessary. With the aid of a "Calendar Function" a designated user may interrogate the database to look for information with respect to a particular day or period either in total or for a particular job or cost centre. The "48 Hours" package works in conjunction with EuroPayX our irish payroll package, into which it feeds hours worked.

This is our latest software package designed for companies to manage the requirements of the "Working Time Act 1997". The payroll system records all hours worked, all breaks taken, holidays taken, all absences, and ensures that the company and it’s employees are in adherence to the Act.

Budget 2011 - Share Schemes

2010-12-24T08:49:00.002Z

Budget 2011 made a number of changes to the tax treatment of gains arising from various types of share schemes, including making such gains chargeable to the new Universal Social Charge (USC). This note from Revenue outlines these changes and provides some general guidance on their likely impact.

Share awards

Before Budget 2011, share awards in various forms were dealt with under the self-assessment system. Most other types of perquisites are dealt with under the PAYE system. From 1 January 2011 share awards will be within the PAYE system and will be treated in the same way as other perquisites. Thus, the net value of any shares is to be treated as notional pay at the time the shares are given to the employee. If the calculated PAYE/PRSI liability exceeds the employee's pay, the employer is obliged to account for and remit the total PAYE/PRSI due on the combined actual and notional pay (in full) with the relevant monthly P30 return. The amount not deducted from the employee’s pay or any 'shortfall' not deducted in the particular pay period may be recouped from the employee by collecting it over remaining pay periods in the tax year. The income tax paid on account by the employer at the time the benefit was provided must be recouped from the employee in full by March 31st of the following tax year, otherwise, the employee will be treated as having received a further benefit on the relevant 31st March equivalent to the amount of un-recouped income tax and the employer must operate PAYE/PRSI on this amount.
From 1 January 2011 the USC on the net value of share awards will also have to be deducted and paid by employers through payroll.

Share options

Gains on the exercise of share options will continue to be dealt with under the self-assessment system. Employees are obliged to pay relevant tax on share options (RTSO) within thirty days of exercising an option. USC will be payable on share option gains at the same time as any RTSO is payable. Where share options under a Revenue approved share option scheme are exercised on or after 24 November 2010 (date of publication of National Recovery Plan), any gains on the exercise are no longer exempt from income tax and therefore fall to be treated in the same way as any other share option.

Approved profit sharing schemes

The net value of any share awards under a Revenue approved profit sharing scheme will continue to be exempt from income tax but will be chargeable to USC from 1 January 2011. The chargeable event will be the date of appropriation of the shares by the trustees to the scheme participants. The chargeable value will be the initial market value of the shares (within the meaning of section 510(2) TCA 1997) on that date. The Finance Bill will contain measures to provide for the collection of USC as respects shares appropriated on or after 1 January 2011.

Employee share ownership trusts (ESOTs)

As with approved profit sharing schemes, the charge to USC will arise after the shares have been passed on to the approved profit sharing scheme trustees by the ESOT at the time of appropriation of the shares to the scheme participants.

Savings-related share option schemes (SAYE)

Any gains on options that are exercised at the end of the contractual savings term will continue to be exempt from income tax but will be chargeable to USC at the time of exercise. Gains will be treated as notional pay and dealt with by employers through payroll.

PRSI

PRSI will apply to share awards from 1 January 2011 in the same way as it applies to any other perquisite that is taxed under the PAYE system.
The Revenue approved profit sharing schemes (including schemes associated with ESOTs) and savings-related share option schemes are to be chargeable to PRSI, as are gains on the exercise of share options. Clarification of how and when PRSI will be charged and collected will be provided by the Department of Social Protection.
Further information
Given that various share schemes operate in accordance with their own particular rules and structures it is not possible for Revenue to provide guidance on all aspects of these matters. However, as practical implementation issues arise and are brought to the attention of Revenue this note will be updated as needed

Christmas Break

2010-12-23T10:54:00.002Z

I would like to thank all the readers of my Blog and all Ardbrook's customers for a successful 2010 and wish you all a happy and prosperous 2011.

Ardbrook's offices will be closed from 1pm on Friday 24th of December until 10am on Wednesday December 29th

Budget 2011 - Year-End 2010 Check List

2010-12-20T08:01:00.002Z

This is check list of reports and functions to be performed in your EuroPayX or PayDay payroll when closing off 2010 Tax Year and entering 2011 Tax Year. For more information see the documentation provided and/or manual. Once again if you have a week 53 ( In 2010 a payroll run date of 31st December) it must be done as a separate payroll run and not be included in holiday weeks.

Import Tax Credit file as downloaded from ROS. (Check that the Tax Registration number on the file is the same as your DataSet.) In 2011 Due to the Reduction in personal tax credits and cut-off points, it is essential that the latest P2C's are loaded immediately, otherwise employees will have an under payment of tax, which will be clawed back in subsequent pay periods further reducing net pay.
Print the "Tax Credit Import Process Report". Optional : If you require a listing of the contents of the Tax Credit file print the "Tax Credit File Print" Report.
Manually enter any Paper Tax Credits (don’t forget Cut-Off Points) issued after your Tax Credit file.
Amend Central Statistics Office NES Survey parameters, if applicable.
As all PRSI Class K employees were changed to M by the year end cleardown, if you have any "office holders" on your payroll you need to set them onto PRSI Class K1
Run the first period of the new Tax-Year

Check List (Closing off 2010)

Install the 2010/2011 Year End/Tax Year Update CD if you haven’t already done so.
Ensure all Frequencies are Period Updated. (Status should say Updated or Not Used)
Back-Up and/or Copy the DataSet and put the back-up in a safe place (preferably off-site).
Print the P35 Validation Report. This lists missing or invalid PPS Numbers, missing Dates of Birth or Addresses that should be entered or corrected before producing the P35 XML (for ROS) file and printing P60s. Please note that the revenue will no longer accept a P35 return on diskette. They will only accept the P35 using the Revenue Online Service (ROS) or by paper on approved stationery. This is a manual exercise and will require the transcribing of the P35 figures from printed reports onto the revenue supplied stationery.
Print Plain Paper P35 report for your own records and check for anomalies.
Produce P35 XML File for Revenue NOTE: To be compatible for ROS you must be running EuroPay Xtra or PayDay on a Windows XP, Vista, 7 or 2000 computer. The internal modules within EuroPay Xtra and PayDay to produce XML files use some of the latest PC technology which is not supported by older Operating Systems (O/S) or Computers
Print P60s on new plain paper option, Z fold pressure seal (EuroPay Xtra) or on the pre-printed forms provided by Revenue.
Print Income Levy Certificates and where necessary PRD Certificates
Print Employee Details (Long) Report for all employees [PayDay].
Run "Clear-Down PayRoll" option from the "Year-End” Menu.

Check List (Entering 2011)

EuroPayX and PayDay Budget Update CD's

2010-12-17T08:18:00.000Z

Ardbrook will post out the Budget update CD's for 2011 Today. If you require the update sooner please contact us, you can collect your CD by courier or receive your update via email or by download.

Budget 2011 - PRSI Class K

2010-12-16T07:28:00.001Z

As part of Budget 2011 Office Holders for the purposes of PRSI are to be assigned to class K. Emoluments paid by public bodies to public office holders.

“public office holder” means -

(a)        the President,
(b)        the holder of a qualifying office, e.g. Ministers
(c)        a member of either House of the Oireachtas,
(d)        a member of the judiciary,
(e)        a military judge appointed under Chapter IVC of Part V of the Defence Act 1954 (amended by the   Defence (Amendment) Act 2007),
(f)         a member of a local authority (within the meaning of the Local Government Act 2001),
(g)        a member of the European Parliament for a constituency in the State, being a member who is in receipt of the salary specified in section 2(2) of the European Parliament (Irish Constituency Members) Act 2009;

“public body” means -

(a)        a Department of State,
(b)       a local authority, or
(c)       a body established by any enactment;

Budget 2011 - Revised Operation of Universal Social Charge

2010-12-15T21:35:00.001Z

Previously we had been told that for all practical purposes we could ignore the lower €4004 threshold, however today Revenue stated that the arrangements for the treatment of the lower threshold of Univeral Social Charge (€4004) has been changed so that those earning €4004 are not to be subjected to charge.

This means that if an employees Gross pay for USC does not exceed €77 per week then they will not be subject to the USC, however if the Gross pay for USC goes over the €77 euro limit by even 1 cent then the employee must pay USC on the whole amount, and not just the amount in excess of €77.

The threshold of €4004 equates as follows:

Weekly €77
Fortnightly €154
Monthly €334
Twice monthly €167
Bimonthly €667
Quarterly €1001
Half Yearly €2002

Revenue - Employer Copy of Tax Credit Certificate

2010-12-15T15:26:00.000Z

Employer’s copy of employees Tax Credit Certificates (P2Cs) will issue through the Revenue On-Line Service by the 15, December 2010. For Employers/Agents not registered for ROS, these certificates will be sent by post during the week commencing 13 December 2010.

Budget 2011 - The Parking Levy

2010-12-15T08:26:00.001Z

The Ministerial Order to introduce the Parking Levy was signed in July 2010, and can be introduced at any time, subject to 3 months notice. It is unlikely the Parking Levy will go live prior to 1 April 2011, and will only if the designated areas in which the levy will apply are published and the 3 months notice of implementation given.

The amount of Parking Levy collected from employees will be included in the PAYE box when remitting the P30 Monthly / Quarterly return. The P35 will be required to include the number of employees from whom they have deducted the Parking Levy and the overall amount of the levy deducted.

Budget 2011 - Irish Payroll PRSI Clarifications

2010-12-14T08:20:00.001Z

Confirmation from Welfare for Class K - if earnings less than or equal to €100 in a week record as M.

Employee and Employer reckonable earnings for PRSI purposes are to be calculated independently, and at the relevant rate in respect of each seperate amount. This leads to the potential problem where employee and employer PRSI are returned at two different PRSI classes. To avoid this the return (contribution) will always be at the subclass designated by the employee reckonable earnings.

Advance Notice to computer users for PRSI changes now available on welfare.ie click here

Budget 2011 - Irish Payroll USC Clarification

2010-12-13T09:17:00.005Z

The €4,004 yearly exemption is to be applied for to the Revenue only at the end of the year. It is not to be broken down into weekly/monthly/etc equivalents to be applied in weekly/monthly/etc payroll. This is different to the Income Levy where the €15,028 was broken down and applied weekly/monthly/etc. Throughout the year the only thresholds/rates to be applied in payroll are €10,036 @ 2%, the next €5,980 @ 4% and the balance at 7%. Folks aged 70 or over pay a max of 4%, starting above €10,036. This exemption it has to be applied for at year end to the revenue commissioners by the individual employee.

DISREGARD!

THIS HAS NOW BEEN CHANGED BY DEPARTMENT OF FINANCE TODAY 15 December 2010

Budget 2011 - Emergency Tax Credits and Bands

2010-12-09T16:47:00.001Z

With the revised tax credits and Cut Offs for Irish payroll for 2011, when calculating tax on an emergency basis the credits and cut offs are as follows

Where employee does not provide a PPS Number

Weekly Paid

Weeks 1 - 4 CutOff Point €631 Weekly Tax Credit €32

Weeks 5 - 8 CutOff Point €631 Weekly Tax Credit nil

Week 9 onwards CutOff Point nil Weekly Tax Credit nil

Monthly Paid

Month 1 CutOff Point €2,734 Monthly Tax Credit €138

Month 2 CutOff Point €2,734 Monthly Tax Credit nil

Month 3 onwards CutOff Point nil Monthly Tax Credit nil

Where an employee does not provide a PPS number

The higher rate of 41% applies to all earnings from Week/Month 1.

The operation of the emergency tax system is unchanged for 2011.

Budget 2011 - Pension changes

2010-12-08T19:01:00.000Z

Pension changes for Irish payroll introduced in Budget 2011

Employee PRSI on pension contributions

From 1 January 2011, employee contributions to occupational pension schemes and other pension arrangements will be subject to employee PRSI and the Universal Social Charge. The PRSI change will be legislated for in the Social Welfare Bill.

Employer PRSI on pension contributions

The current employer PRSI exemption for employee contributions to occupational pension schemes and other pension arrangements will be reduced by 50% from 1 January 2011. The change will be legislated for in the Social Welfare Bill.

Contribution limit
Maximum allowable pension funds

The maximum allowable pension fund on retirement for tax purposes (known as the Standard Fund Threshold (SFT)), is to be set at €2.3 million with effect from 7 December 2010.
A higher threshold may apply if, on 7 December 2010, the capital value of an individual’s pension rights drawn down on or after 7 December 2005 (i.e. crystallised pension rights) when added to any uncrystallised pension rights the individual may have, as valued on 7 December 2010, are greater than €2.3 million and lower than €5,418,085 which is the current value of the SFT.

Approved Retirement Funds
The annual imputed distribution which applies to the value of assets in an Approved Retirement Fund (ARF) at 31 December each year is being increased from 3% to 5% in respect of asset values at 31 December 2010 and future years.

Retirement lump sums
The overall life-time limit on the amount of tax-free retirement lump sums that an individual can draw down from pension arrangements is being reduced to €200,000. The excess of this amount will be taxed at the standard income tax rate (currently 20%) up to an amount equal to 25% of the new Standard Fund Threshold (up to €575,000). The excess of retirement lump sum payments over that amount will be taxed at the taxpayer’s marginal rate of income tax.
Tax-free retirement lump sums taken on or after 7 December 2005 will count towards “using up” the new tax free amount so that if an individual has already taken tax free retirement lump sums of €200,000 or more since 7 December 2005, any further retirement lump sums paid to the individual on or after 1 January 2011 will be taxable. These earlier lump sums will also count towards determining how much of a lump sum paid on or after Budget day is to be charged at the standard or marginal tax rate.
These changes take effect from 1 January 2011.

Extension of flexible options on retirement
All members of Defined Contribution pension arrangements will have access to flexible options on retirement in respect of the main benefits arising from those schemes, subject to certain conditions. The flexible options will be provided for in the Finance Bill. Pending the passing of the Finance Bill, the option introduced in December 2008 to allow the deferral of annuity purchase on retirement for defined contribution scheme members is to be extended by the Revenue Commissioners.

The annual earnings limit which (along with age-related percentage limits) determines the maximum tax-relievable contributions for pension purposes is being reduced from €150,000 (2010) to €115,000 for 2011. The annual earnings limit for the year of assessment 2010 will also be deemed to be €115,000 for the purpose of determining how much of a pension contribution paid by an individual in the year of assessment 2011 will be treated as paid in 2010, where the individual elects under existing rules to have it so treated.

Budget 2011 - PRSI Changes

2010-12-08T10:02:00.001Z

The several changes to the calculation of PRSI in Irish payroll for 2011 as follows:

Employers

There are some changes to rates for 2011.

The Minister announced an Employer Jobs Incentive Scheme for 2010, this scheme has been extended for 2011. Where an employer creates a new job and takes on a person who has been unemployed for at least six (6) months, the employer will be exempt from paying Employers PRSI in the respect of that person’s employment for a period of one (1) year from the date of commencement.

Employees

The contribution ceiling has been removed
For 2011 reckonable earnings for calculation of employee PRSI is NOT reduced by employee pension contributions. Reckonable earnings for calculation of employer PRSI is reduced only by 50% of the employee's pension contributions.
The Health levy of 4% has been removed from PRSI, this means that in 2011 some sub-classes (For example A1 and AL) feature identical rates.
Employees earning €352 per week or less (€352), will be exempt from PRSI.
For employees earning in excess of €352 per week (€352) the first €127 per week will
continue to be free of PRSI.
Class S for the self employed rate has been increased from 3% to 4%
Modified PRSI rates (certain public servants) increased to 4% on incomes in excess of €75,036
Introduction of a 4% PRSI charge for certain Office Holders

Please ensure that you read the PRSI CONTRIBUTION RATES 2011 notes provided by the PRSI
Information Section of the Dept. of Social, Community and Family Affairs.

Budget 2011 - New Universal Social Charge

2010-12-08T07:40:00.005Z

For Irish payroll the new Universal Social Charge is a combination of the old Income Levy and the Health Levy. The Universal Social Charge effective 1 January 2011, is payable on Gross Income before any
relief for Pension Contributions, Capital Allowances or Losses. All individuals are liable to pay the Universal Social Charge, if their gross income exceeds the threshold of €4,004 per annum. Medical card holders are not exempt from the Universal Social Charge.

The band and rates for Universal Social Charge are

Persons under the age of 70

0% < €4,004
2% €0 to €10,036
4% €10,037 to €16,016
7% > €16,016

Persons aged 70 or over

0% < €4,004
2% €0 to €10,036
4% > €10,037

Revenue Universal Social Charge FAQ's

Budget 2011 - Other changes

2010-12-07T22:28:00.001Z

Other changes that may have an impact on the running of Irish payroll in tax year 2011 are as follows:

Abolition of Tax relief on Trade Union subscriptions
Abolition of Tax relief on subscriptions to professional bodies
Abolition of Tax relief on approved share option schemes
Abolition of relief on BIK for employer provided childcare

Budget 2011 - Public Service Pension-related Deduction Changes

2010-12-07T20:38:00.001Z

From 1 January 2011, the pension-related deduction which is charged to earnings in the public service will be subject to employee PRSI and the Universal Social Charge to be introduced on 1 January 2011. The PRSI change will be legislated for in the Social Welfare Bill.

Budget 2011 - PAYE Tax Credits and Bands

2010-12-07T19:20:00.001Z

Tax Rates

The Standard Rate remains at 20% and the Higher Rate is unchanged at 41% or 40% if Marginal Rate applies (the marginal rate is unchanged).
The Sub-Contractor rate has changed it is now for sub contractors registered for tax with an established compliance record at 20% and 35% for sub contractors not registered for tax.

The Bands of Taxable Income for the Tax Year are as follows:

Single/Widowed € 32,800 (€ 36,400) @ 20% (without dependent children) Balance @ 41% or 40% if Marginal Rate applies
Single/Widowed € 36,800 (€ 40,400) @ 20% (One-Parent Family Tax Credit) Balance @ 41% or 40% if Marginal Rate applies
Married Couple € 41,800 (€ 45,400) @ 20% (one spouse with income) Balance @ 41% or 40% if Marginal Rate applies
Married Couple € 41,800 - 65,600 (€ 45,400 - 72,800) @ 20% (both spouses with income) Balance @ 41% or 40% if Marginal Rate applies

Tax Credits

Entitlement to a tax credit is dependent on personal circumstances e.g. married, non-PAYE income etc., the basic annual tax credits have changed as follows:

Single € 1,650 (€ 1,830)
Married € 3,300 (€ 3,660)
PAYE € 1,650 (€ 1,830)

Budget 2011 - Main Points

2010-12-07T16:33:00.003Z

The main points of budget 2011, in particular those relating to the calculation of irish payroll are:

No reduction in state pension
€10 reduction in Child Benefit in both lower and higher rates, additional reduction of €10 for third child
Extension of Employer's PRSI incentive scheme to 2011

Public service pensions above €12,000 per year will be reduced by 4%
Income tax band and credits to be lowered by 10 per cent
People on new reduced minimum wage will not be brought into tax net
DIRT increased by 2 per cent to 27 per cent on ordinary deposit accounts and by 2 per cent to 30 per cent on longer-term deposit accounts
No change to 12.5% corporation tax rate
All property-based tax reliefs to be effectively terminated by 2014
Flat rate of 1 per cent stamp duty on all residential property transactions up to €1 million. Increase of 2 per cent duty on transaction over that amount
All stamp duty exemptions abolished, which means first time buyers exemption is removed.
Air travel tax reduced from €10 to €3 from March 2011
Car scrappage scheme extended for a further six months
Litre of petrol to rise by 4 cent, litre of diesel increase by 2 cent
Income levy, health levy abolished and will be replaced with single universal social charge
Employee PRSI contribution ceiling removed
PRSI rate for self-employed, higher earning public servants and office holders to be increased
A total of 25 tax reliefs to be abolished or restricted including Tax relief on trade union subscriptions
Accelerated capital allowances scheme for energy efficient equipment timeframe to be extended.

these are the basic outline only, over the comming days we will post the detail of how these will effect the calculation of Irish Payroll , PAYE, PRSI and Universal Social Charge.

Revenue - eRegistration

2010-12-07T04:59:00.001Z

Monday 29th November 2010 saw the introduction of an increased range of eRegistration services through Revenue’s Online Service (ROS) These services include:-

Registering a new business for,
- Income Tax,
- Corporation Tax,
- Employers PAYE/PRSI,
- Value Added Tax,
- Relevant Contracts Tax,
- e-Levy.
Registering an existing business for any of the above taxes as additional taxes.
Cancelling any or all tax registrations for an existing business.
Allowing a ROS user, either an agent or an individual ROS user, to manage agent/client 'links'.

It is proposed to support the registration of Partnerships and Trusts and Re-Registrations via ROS from the end of March 2011. Registration of Foreign Companies and Unincorporated Bodies are excluded from eRegistration for the present.

Agent Services Screen

Access to eRegistration services will be through the agent services screen in ROS

Agent registering a new business

Where and agent is registering a new business, he/she will be required to attach a copy of the client’s authorisation letter. This attachment, which will be a scanned copy of the authorisation letter, must be in "tiff" format and not exceed 5MB in size. The following information may be of some assistance:

Tiff Files

Tagged Image File Format (TIFF) is a common file format used for storing images. The TIFF format is widely supported by scanning and image viewing applications across all platforms (Windows, Mac and Unix). TIFF files have a file name extension of ".tif" or ".tiff". It is possible to convert other image file formats, such as .jpg, .gif etc., using most common image manipulation applications.

Information required to complete an on-line registration

When selecting whether to complete a new registration for an individual or company, you will be presented with a screen outlining the data necessary to complete the application on-line. The on-line application will then take you through a logical and simple series of screens to gather the information necessary to complete the application.

What's new?

For any application from outside the European Economic Area (EEA), you will be asked for the Garda National Immigration Bureau (GNIB) number and Stamp number. If this is not available, the application will be refused and a paper application will be required. There is, however, provision for applicants in certain professional categories from outside the EEA to indicate that a GNIB permit is not required and the on-line application can proceed.

Income Tax application – Assessable status

Please note that when completing an Income Tax on-line application, whether for an individual or a Director registering for the first time, the applicant must either be single or the assessable spouse. An Income Tax application for a non-assessable spouse should continue to be submitted on paper.

Cancellations

Notification of cancellation of a tax registration using the eRegistration facility will require only the provision the date of cancellation and a cancellation reason in the case of a notification of cessation of a VAT registration.

Lastest Budget 2011 Predictions

2010-12-06T08:25:00.003Z

With Budget 2011 only a day away here are some of the latest predictions for what that budget might contain

Employee PRSI ceiling to be abolished, currently at €75,036
A lowering of personal income tax bands and credits or equivalent measures
A reduction in pension tax relief and pension related deductions

Car Scrappage scheme to be extended
Petrol and Diesel prices expected to rise
Cut in child benefit
Airport travel tax likely to be cut from €10 to €2
Government Ministers face pay cuts of upto €20,000

we will post full details of the actual budget changes after the Brian Lenihan announces them in the Dail tomorrow afternoon.

PayDay - Printing Screens

2010-12-06T07:41:00.003Z

Within the PayDay irish payroll software package, both the Employee Details and Adjust and Calculate/Payslip screens can be printed by pressing the F12 Key.

Budget 2011 details revealed in Recovery Package MOU

2010-12-02T05:06:00.000Z

The Memorandum Of Understanding about the Recovery Package published yesterday seems to imply that there will be changes made to the revenue systems during 2011 (as opposed to at the start of the year). The document refers to a "yield €945m in 2011 and an extra €300m in a full year" when it discusses changes to personal tax bands and credits.

This would seem to indicate that the values will change after the first quarter of 2011 and that these changes will not be retrospective. In other words, we could have two (or more?) separate cumulative systems running during 2011, or that the existing bands and limts will run into the new tax year and the revised tax credits and bands only come into effect after Q1?

The following is from the text of the MOU as published yesterday which gives an outline of the next three budgets.

ACTIONS for the first review (actions to be completed by end Q1-2011)

The budget includes the following measures (in exceptional circumstances, measures yielding comparable savings could be considered in close consultation with European Commission, IMF and ECB staffs);
Revenue measures to raise at least €1,400m in 2011 and an extra €620m. in a full year will be introduced to the Houses of the Oireachtas, including:

A lowering of personal income tax bands and credits or equivalent measures to yield €945m in 2011 and an extra €300m in a full year.
A reduction in pension tax relief and pension related deductions to yield €155m in 2011, and an extra €105m in a full year.
A reduction in general tax expenditures to yield €220m in 2011, and an extra €185m in a full year.
Excise and miscellaneous tax measures to raise €80m in 2011 and a further €30m in a full year will be introduced.

The government will outline methods to raise at least €700m in one-off and other measures in 2011.

ACTIONS for the first review (actions to be completed by end Q4-2011)

The government will provide a draft budget for 2012 aiming to further reduce the general government deficit in line with the National Recovery Plan and the programme and including the detailed presentation of consolidation measures amount to at least €3.6bn.

Revenue measures to yield €1,500m in a full year will be adopted, including:

A lowering of persona income tax bands and credits.
A reduction in private pension tax reliefs.
A reduction in general tax expenditures.
A property tax.
A reform of capital gains tax and acquisitions tax.
An increase in carbon tax.

ACTIONS for the eight review (actions to be completed by end Q4-2012)

The government will provide a draft budget for 2013 aiming to further reduce the general government deficit in line with the 4-year plan and the programme and including the detailed presentation of consolidation measures amount to at least €3.100m.

Revenue measures to yield €1,100m in a full year will be introduced, including:

A lowering of persona income tax bands and credits.
A reduction in private pension tax reliefs.
A reduction in general tax expenditures.
A increase in property tax.

EuroPayX - Now you can email P60's and Levy Certs

2010-12-01T07:50:00.001Z

For this tax year end Ardbrook have added the option to our EuroPayX irish payroll software to enable you to email P60's and Year End Income Levy Certs to your employees. If you already use the email payslip facility then this option is for you.

Setting up Email Payslips, P60's and Levy Certs

Options – Company Details – Email Address – Enter the email address from which the payslips are being sent eg info@ardbrook.ie
(Applies to Email Payslips only) Options – Pay Controls – Payslip Tab – Initialise Email Payslip Count – Use this option to purchase a quantity of email payslips. The number decrements as they are used.
Options – Pay Controls – Email Tab – Lotus Notes Email – Only tick this box if client is using Lotus Notes. EuroPay uses Microsoft Outlook by default. Also enter the Mail Server Name e.g. mail1.eircom.net
Employee – Basic Tab – Email Address – Enter the email address which the employee wants the payslip, P60 or Income Levy Cert to be sent
Employee – HR Tab – Password – Enter a password if employee wishes to secure the email attachment containing the payslip. For a new employee it is possible to default the password to be the same as the employee PPS number. Tick Active box if password is to be used.
Employee – HR Tab – Email Payslip – Tick this box if employee is to receive payslip via email
Payroll Run – Reporting – Payslips – Send Report To – Email (PDF) – Tick this box to generate email paylips for those employees who are calculated and with option 6 above active

EuroPayX - Make use of Word Links

2010-11-30T08:34:00.001Z

The EuroPayX irish payroll software has a facility called Word Links which allows you to "MailMerge" with Microsoft Word. This is done by creating a Word document with bookmarks inserted into positions at which data from the payroll will be placed, for example employee name,address,salary etc, then within EuroPayX you create a link which defines what data is to be sent and the name of the Word document. Word links can be used for sending standard letters to employees on a variety of topics such as pension, salary changes etc.

EU agree €85 billion rescue package for Ireland

2010-11-28T21:57:00.004Z

The EU has tonight agreed a €85 billion rescue package for Ireland, €10 billion of which will immediately be used to secure the banks. €17.5 billion of these funds are to come from the Irish pension reserve fund.the remainder being supplied by the EU and IMF at an average interest rate of 5.83%.

Key points include

Ireland has been given an extra year, until 2015 to reduce the budget deficit to 3% of GDP required by the EU.
€15bn in Budget spending cuts and tax increases.
Restructuring of the main banks.
Banks must draw up a list of potential assets to dispose of.
A clampdown on public-sector pay.

EuroPayX - Setting up a Gross To Net Excel Link

2010-11-26T08:15:00.001Z

It can be useful to setup an Excel link in EuroPayX specifically to replicate the Gross to Net report but with additional fields (usually each Addition and Deduction in the payroll). This overcomes the limitations on the standard gross to net report whose content is limited by the size of an A4 page and allows for a greater level of detail in reporting.

Excel Sheet created by EuroPayX and data then used to create graph.

The Excel link function within EuroPayX can be used to create multiple links that allow data to be transferred to Microsoft Excel spreadsheets. Employee, Employee History and Analysis data can be transferred for any the current payroll run or any past payroll period. The transferred data can then be analysied, charts produced and full advantage taken of the facilities of the spreadsheet package.

€15bn Cuts and Taxes announced

2010-11-24T14:54:00.011Z

Some of the taxation measures introduced in the four-year plan are as follows

Maintain the 12.5% corporation tax rate
PAYE threshold reduced by €3,000 to €15,300 by 2014
Net Pay by 2014 for a single person on €55,000 will be reduced by €1,860 per annum (€36 per week) or 4.8%. The net pay for a married on-income family on €55,000 will be reduced by €2,310 per annum (€44 per week) or 5.4%.
pension relief changes in the plan provides for the elimination of employee PRSI and Health Levy relief on pension contributions in 2011. It also commits, among other changes in 2011, to reducing the annual earnings cap for employee/personal pension contributions by almost 25% from €150,000 to €115,000
Ex-gratia termination and pension lump sum payments in excess of €200,000 to be taxed
PRSI, Health and Income Levy relief will no longer apply to Approved Profit Sharing Schemes and Approved Save-As-You-Earn Schemes.
PRSI, Health Levy charge for Unapproved Share Options and Share Awards.
Tax relief on trade union subscriptions will be abolished in 2011.
Increase Vat rate from 21% to 22% in 2013, increasing to 23% in 2014
introduce a "local services" (interim property tax) contribution of €100 per annum
Reform capital acquisitions and capitals gain tax

Click here to view Revenue Summary Leaflet (PDF)

Click here to view Full National Recovery Plan (PDF)

Budget 2011 will not be brought forward

2010-11-24T07:57:00.000Z

Taoiseach Brian Cowen stated last night that the budget will not be held earlier than planned. The €15bn euro deficit reduction plan will be unveiled this afternoon. It has been reported in the irish press that included in the four-year plan will be

an increase in the marginal rate of tax to 42 per cent or higher
tax credits being reduced and tax bands being widened
a cut to the minimum wage from €8.65 an hour to €7.65
introduction of a "local services" charge
cuts to the social welfare budget of €2.5bn over the four years

Will you have a Week 53 this year?

2010-11-24T07:45:00.000Z

Simply put if your payroll date falls on Friday the 31st December 2010 then you will have a week 53 payroll period, otherwise no. In a week 53 situation the payroll period must be run individually and cannot be part of a two week calculation for holiday shutdown as week 53 is run on week one calculation basis and not a cumulative basis. As a result, the employee will get the benefit of more than the year's total tax credits and standard rate cut-off point

Reduced frequency of tax returns and payments

2010-11-23T07:39:00.002Z

Reductions in the frequency of PAYE/PRSI and VAT tax returns and payments for smaller businesses will again be extended to eligible businesses from 1 January 2011. Similar arrangements in respect of RCT will also become available from that date.

Businesses making total annual VAT payments of less than €3,000 are eligible to file VAT returns and make their payments on a 6 monthly basis;
Businesses making total annual VAT payments of between €3,000 and €14,400 are eligible to file VAT returns and make their payments on a 4 monthly basis;
Businesses making total annual PAYE/PRSI payments of up to €28,800 are eligible to make their payments on a 3 monthly basis; and
Businesses making total annual RCT payments of up to €28,800 will now be eligible to file RCT returns and make payments on a 3 monthly basis.

What are the benefits to businesses?
The benefits for qualifying businesses are two-fold:

Improved cashflow by only having to make payments at the end of each 3, 4 or 6 monthly period as appropriate.
Reduced costs of administration through less frequent filing of tax returns.

How will these changes be implemented?
Revenue is now in the course of writing to each eligible business advising them of the reduced frequency of tax returns and tax payments that will apply to them with effect from 1 January 2011.
A copy of the letter will also be sent to the agent or tax practitioner on record for eligible VAT and RCT customers. We are unable to provide a copy of the letter to the agent or tax practitioner on record for eligible PAYE/PRSI customers.
There is no need for businesses to take any action to benefit from these changes. The letter they receive will confirm that the reduced payment and filing frequency is being automatically extended to them from 1 January 2011

PayDay - Did you know about pop-up calculator

2010-11-22T09:46:00.000Z

In PayDay if you right mouse click in a numeric field in any window then a calculator will pop-up, you can then use it and return the result into the numeric field on screen.

Irish bank modulus checker available for software developers

2010-11-22T09:04:00.001Z

Modulus Checker is software developed by Ardbrook Limited, that enables the user to validate the accuracy of any sort code / bank account number combination, for the clearing banks within the Republic of Ireland and Northern Ireland; and sort code only for the non-clearing banks.

This is achieved by running in reverse the internal algorithms of each of the clearing banks on the sort code / bank account numbered entered. Modulus Checker contains a complete user-maintainable database of all bank branches within the Republic of Ireland and Northern Ireland.

There are two DLL versions available, .NET or Active X. As a DLL, it allows the user to call the validation routines within Modulus Checker directly from within their own software. This necessitates a software change to be made to in-house systems to allow for immediate validation, on the input of a sort code bank account number combination through an automatic call being made to the DLL. Then a pass or fail verdict is returned to the user.

Ireland asks for EU/IMF bailout

2010-11-21T20:58:00.002Z

Taoiseach Brian Cowen has announced that the EU has agreed to a joint EU/IMF bailout details of which will be negotiated in the coming weeks. The package will be over three years and is linked to restructuring of the Irish banking sector and a deficit reduction plan. Brian Cowen also stated that income tax levels will be returned to 2006 levels.

EuroPayX - Did you know that photos can be linked to an employee

2010-11-19T07:55:00.000Z

In EuroPayX a photograph can be linked to an employee's master file record. To do this simply click on the HR tab and then using the browse button against the image file entry, locate and select the required image. The image selected will appear when viewing the employee master record.

Government may accept EU funding

2010-11-18T16:02:00.001Z

Today Minister for Finance Brian Lenihan said the Government may accept EU funding for the banks after talks in Dublin with the European Union and International Monetary Fund.

The Government however is also expected to battle to prevent any increase in the €6 billion adjustment proposed for the 2011 budget and the €15 billion target in the four-year plan.

What Everybody Ought to Know about P30/P35 Differences

2010-11-18T14:40:00.001Z

As we approach the end of the tax year our minds turn to P30/P35 differences, or maybe not! If, on period update (or manually selecting the P30/P35 comparison option) you find that you have a difference between your P30 (Company) and P35 (Employee) totals either in the tax, PRSI or both then it may be due to one of the following reasons

A new employee was setup with PRSI figures from another employment.
A new employee was setup with P45 pay and tax entered as this employment.
An employee's PRSI class was changed without retaining existing data.
A manual adjustment was made to an employee's tax, PRSI or income levy (soon to be Universal Social Charge) but no corresponding change was made to the company's P30 details

EuroPayX also provides a set of reports to help identify potential employee records that may be causing the difference. To run these reports choose Tools->Data Doctor->Reporting and choose from the following diagnostic reports depending on where the difference is

P30/P35 tax comparison
P30/P35 Employee PRSI comparison
P30/P35 Employer PRSI comparison
P30/P35 Income Levy (USC) comparison

The employees who appear on these reports are only potential causes of your P30/P35 difference they may appear for other reasons such as having been transferred internally.

PayDay has a P30/P35 find differences report under misc reports to help identify employee records that may be causing the differences.

Dataset Archiving in PayDay

2010-11-17T08:26:00.001Z

DataSet Archiving in PayDay is the automatic storing of Datasets during each period update, but before clearing down all this period values. Archived Datasets can then be accessed at any stage, allowing reports to be run, etc. To access Archived Datasets (ensure there is no currently open Dataset) select ‘File’, and then ‘Archived Datasets’ from the main menu.

Archive Selection

PayDay by default displays all Archives, to reduce the number down use the
Archive Selections options.

Company Name -Limits the list of archives to the selected company.
All Archives - List both Period Update and Year End Archives
Period Update Archives - List only Archives created for a Period Update. Tax Year - Select Archives for a tax year. Frequency - Select Archives for frequency.
Year-End Cleardown Archives - List only Archives created prior to the Year End Cleardown of a tax year

Archived Datasets

‘Archived Datasets’ lists all Archives matching the Archive Selection and in the current ‘Archived DataSet Path’. Listed for each Archive is the Extension (Company Code), Tax Year, Frequency and Period (where applicable) of when it was created. To see details on a archived dataset highlight it, and information for the
Archive DataSet, at the point it was created will display.

Archived DataSet Path
The Archived DataSet Path, is set to the ‘ARCHIVE’ directory, below the current default directory. You should not need to change it.

Open Archive
Opens the currently selected archived DataSet. It is not possible to calculate or period update a Archived DataSet, but you can print all reports, etc.

Delete Archive
Deletes the currently selected archived DataSet. Frees up disk space.

Restore Archive
Restores the currently selected DataSet over the original. This option is password protected to avoid accidental use.

Note: DataSet Archiving can be turned off in the [System Parameters] window.

Parking Levy Awaiting Implementation

2010-11-16T10:26:00.001Z

Recently I have been queried a number of times regarding when the parking levy will start. The current situation is that the minister has signed the parking levy into force so it can go live at any time, but it is still awaiting implementation because there are issues in defining the designated areas. Watch this space ....

Four-year budget plan to be announced next week

2010-11-16T10:26:00.000Z

Minister for Justice Dermot Ahern said yesterday that the government would publish it's four-year budget plan early next week. This plan will contain the outline of the proposed budget cuts totalling €15bn over the next four years, budget 2011 will contain the largest single adjustment of €6bn.

Universal Social Charge

2010-11-15T13:39:00.000Z

As we await Budget 2011 on December 7, I want to take a look at one of the changes announced by Brian Lenihan in his budget speech for Budget 2010, the creation of the Universal Social Charge. Originally this was to "replace employee PRSI, the Health Levy and the Income Levy", however this is now unlikely given the time constraints and it will simply combine the Health and Income Levies. I think it is fairly safe to assume that the Universal Social Charge will operate as a "super" Income Levy, that is with new increased rates and adjusted bands. PRSI will be as before but less the Health Levy.

How to Process Disabilty Benefit

2010-11-12T12:28:00.002Z

To handle Disability Benefit for Irish payroll when the employer pays the employee and the employee gives the cheque(s) to the employer.

N.B. Social Welfare payments are not subject to Income Levy

The Payroll Administrator need to set up three new pay elements:

Disability Addition Taxable - Gross Addition, subject to Tax but not PRSI
Disability Deduction Taxable - Gross Deduction , subject to Tax and PRSI
Disability Addition Net - Net Addition, subject to neither Tax nor PRSI

First Six Weeks or 39 Working Days:

Salary / Basic paid as normal
Amount of Disability cheque entered as a Gross Deduction
Amount of Disability cheque entered as a Net Addition

Result: Disability portion not Taxed or subjected to PRSI. Employer only pays PRSI on difference

After Six Weeks

Salary / Basic paid as normal
Amount of disability Cheque entered as a Gross Deduction
Amount of disability Cheque entered as a Gross Addition, subject to Tax but not PRSI

Result: Disability Benefit Taxed, but not subject to PRSI

To handle Disability Benefit when the employer pays the employee and the employee keeps the cheque(s) .

The Payroll Administrator needs to set up four new pay elements

Disability Addition Taxable - Gross Addition, subject to Tax but not PRSI
Disability Deduction Taxable - Gross Deduction, subject to Tax and PRSI
Disability Addition Net - Net Addition, subject to neither Tax nor PRSI
Disability Deduction Net - Net Deduction, subject to neither Tax nor PRSI

First Six weeks or 39 working Days:

Salary / Basic paid as normal
Amount of Disability Cheque entered as a Gross Deduction
Amount of Disability Cheque entered as a Net Addition
Amount of Disability Cheque entered as a Net Deduction.

Result: Disability Portion not Taxed or subject to PRSI. Employer only pays PRSI on difference

After Six Weeks

Salary / Basic Paid as normal
Amount of Disability Cheque entered as a Gross Deduction
Amount of Disability Cheque entered as a Gross Addition, subject to Tax but not PRSI
Amount of Disability Cheque entered as a Net Deduction.

Result: Disability Benefit Taxed, but not subject to PRSI

EuroPayX - View Past Employee Payroll Record

2010-11-11T09:43:00.000Z

You can display an employee's record for any past period by clicking on the calendar tab on the employee window and then double-click on the date required, EuroPayX will then work out the payroll period for that date and then display a copy of the employee record for that period.

EuroPayX - Did you know about Diary Events

2010-11-09T08:26:00.001Z

You can create a diary event in EuroPayX to remind you when to perform a desired action, so that for example you can enter the date on which an employee is due to return from maternity or paternal leave and the event will appear on the system when processing the payroll for that period. To create a diary event use the employee screen, call up the record for the employee to which the event applies and then click on the diary tab. Enter the date on which the reminder is required, EuroPayX will work out the payroll period and you simply enter the text that you wish to appear in that period.

You can NEVER have too many Back-ups

2010-11-08T07:31:00.001Z

Remember to back-up” is the sort of advice that’s taken for granted like “remember to wash behind your ears” and “don’t feed the monkeys”. It’s easily given and just as easily shrugged off. “Whatthehell, it won’t happen to me”. Really? You’ve never had to search for a phone number or address, or re-construct a document that should have been there? At a low level, it’s annoying and wastes time. A worst case scenario may lose you a job or a business. Let me give a few facts and figures.

• 31% of PC users have lost all their data as a result of things beyond their control – electricity surges or outages, to name a couple.
• A hard drive crashes somewhere every 15 seconds.
• The overall, average failure rate of hard disk drives is 100%. To put it another way, all hard disks fail at some time.
• 60% of business data is held on desktop or notebook PCs.
• 40% of small-to-medium sized businesses don’t back-up at all.
• 15% at least of laptops are stolen or suffer system failures.
• 78% of data loss in Ireland is caused by hardware or system malfunctions.

Despite technological advances, data loss statistics continue to rise globally. A network back-up does the work for you every day. But, even though you may be making backups on a daily, weekly and monthly cycle, payroll requires a different approach. Point-In-Time should be the catchword here. The key to security for payroll data is the “point-in-time” back-up which is discussed below. It is of vital importance to understand that your payroll data is not the same as your account’s data (ledger systems).You will note, I am sure, that in the event of data corruption, disk full or some similar system disaster - production of invoices, statements etc. will wait, whereas it is extremely unlikely that your employees would wait calmly for their pay and payslips.
A number of people are moving from single user systems to networks or client-server systems; this does not relieve you of the responsibility of taking security copies of payroll data. A general rule-of-thumb when approaching the question of when to take a back-up of payroll data is that it should be done at all critical points in the payroll cycle (thus “point-in-time” backup).

We would strongly recommend doing back-ups as follows:

1. Immediately prior to Period Update.
2. Prior to timesheet calculation.
Note: If a large number of timesheets are being keyed in, then it is advisable to do a back-up more than once a day (e.g. teabreak and lunch-time).
3. At year end.
4. Prior to loading a Software Update.

The idea of “point-in-time” back-up is best illustrated by the following example:

1. Company runs it’s payrolls each Wednesday morning and updates its payroll prior to running.
2. An error is discovered in the previous payroll period.
3. No back-up of the payroll has been taken and the only one is the system back-up taken by the system manager two days previously.
4. The consequence is the restoration of the payroll data from the system backup which is two days out of date, necessitating re-keying all the data.

Today it is far easier to take a backup quickly onto a single memory key (usb stick), than it was in the past when a back-up sometimes spanned 10 or more floppy disks. So take advantage of this fact and take frequent back-ups, it could be a lifesaver!!

ATTENTION, PayCE users!

2010-11-07T22:31:00.004Z

Do you know that Ardbrook provide Irish payroll systems suitable for any size of enterprise? If you are comfortable and happy with PayCE, why not use one of our payrolls?

PayDay and EuroPay Xtra incorporate full compliance with all aspects of PAYE and PRSI and they are rapidly updated to take into account budgetary and legislative changes. You can have an unlimited number of employees, departments, cost centres etc. In the multi-company versions you can have an unlimited number of companies. Fixed, variable and memo pay elements are catered for and the payroll for any period can be calculated, checked and adjusted, if necessary, prior to the update.

Reports can be outputted to Excel, Word, and in HTML and Acrobat (PDF) formats. If you have access to the internet then payslips can be compressed, and password protected if required, and delivered using your own email service.

Why not file your P35, P45s and receive Tax Credit files from the Revenue Online Services (ROS)? Take the hassle out of Central Statistics Office (CSO) returns with our XML link to the CSO website. Links to time and attendance, personnel and general ledger systems are just some of the other features available.

Worth checking out!

It's official Budget adjustments of €6bn

2010-11-04T20:28:00.007Z

The Government announced today it plans to take measures totalling €6bn in December's Budget. Finance Minister Brian Lenihan has stated that €4.5bn of the €6bn will be in the form of expenditure cuts, the remaining €1.5bn will be in the form of increased taxes. However the details of these measures, of most interest from a payroll point of view will have to wait until budget day, so watch this space!

EuroPayX Employee Self Service Demo now online

2010-11-04T08:30:00.001Z

EuroPayX Employee Self Service (ESS) is a convenient, secure and user-friendly web based application that provides employees with access to their personal and payroll details. ESS allows employees to change their own address, contact details and bank account details. ESS provides details of payslips, both current and historical. ESS can operate using an employers’ intranet or via a web ASP service.

The principal advantage for employers providing ESS is that it is a more efficient means of collecting changes to employees’ details and distributing payroll related details to employees. This is particularly true for organizations dispersed over a number of physical locations. It also helps reduce the number of routine information requests and transactions made directly to payroll personnel.

To access the demo site click on the following Link http://www.ardbrook-ess.ie/

Attention Payroll Users!

2010-11-04T08:03:00.001Z

Do you use Ardbrook’s PayCE software for your direct debits and credits? If not, why not? PayCE, which allows you to credit/debit electronically, works very comfortably in tandem with other software systems. PayCE is compatible with all the banks – most of whom use it themselves.

This totally automated payment process virtually eliminates administration,postage, stationery and printing costs. The system painlessly takes care of fees, memberships, leases, loans, rentals, insurance payments etc. etc.

PayCE includes a database holding all sort codes for all banks in the Republic of Ireland (ROI) plus a database holding all sort codes for all banks in Northern Ireland (NI). Full validation of all ROI and NI bank accounts (modulus checking) is also carried out by PayCE. This means that you can ascertain whether the bank details for a customer / supplier are valid before payment thus eliminating the cost and hassle incurred by a payment being returned by the bank.

Biggest Budget Correction in History of State

2010-11-04T07:44:00.002Z

It has been reported that Minister Brian Lenihan will be announcing later today that the total correction required for Budget 2011 will be nearly doubled to between €5.5bn and €6bn, when only a few months ago the goverment was projecting a figure of €3bn, this is the largest budget correction in the history of the State. Full details will be announced in two weeks in the four year budgetary plan, followed by the budget on December 7.

P60 Stationery

2010-11-03T11:53:00.001Z

Revenue is no longer making P60 stationery available for employers to print P60s for their employees. For the year 2010 onwards, employers must print the P60 form on their own blank stationery. A Revenue approved template of the P60 is used in both our payroll products EuroPayX and PayDay.

EuroPayX - Did you know about Email payslips logos

2010-11-03T08:22:00.001Z

If you use the email payslips option within EuroPayX that you can put your own company logo on the top of the email payslip document. To set the logo file choose Options, Pay Controls and click on the Email tab. Then set the Email Payslip logo path and filename, the logo file can be in bitmap or jpeg format.

Welcome to Bill's Ardbrook Irish Payroll Blog

2010-11-02T12:22:00.001Z

Welcome to my new Ardbrook Irish Payroll blog. The aim of this blog is to enable me to provide you with news, tips and information regarding payroll trends in Ireland and updates on Ardbrook's various software products including EuroPayX and PayDay.

I will post as and when there is something to say, though as we approach budget time postings will become more frequent. To keep updated on postings you can subscribe to the news feed that has been made available. I hope that you will find this blog useful, with the ability to provide an effective means to share information.

Bill.