ACCA (Association of Chartered Certified Accountants) warns that some people in Ireland, who are paid weekly, will find a considerable discrepancy in their wages today as the Government’s new PAYE system beds in.
With many employees across Ireland receiving their first salary under the Government’s new online real time reporting system, the global accountancy body has said that some 120,000 people may be impacted and is advising them that any underpayment will be refunded in a subsequent pay packet by updating their tax records.
For those people that have incorrect employment details, the emergency tax rate of 51 percent will be applied, coming as a big shock for many with their gross pay being cut in half, with the other half being paid in additional income tax.
ACCA has said that this will only be rectified by employees updating their details on myaccount, however it may take some weeks for the employer to refund the full amount of overpaid tax. The professional body has also advised employers against providing additional funds to tide employees over as this may see them having to pay penalties for making incorrect returns.
Commenting Stephen O’Flaherty, Chairman of ACCA Ireland, said: 'Under the old system, accountants were able to manage the PAYE system to ensure that all employees got paid. Under the new online system they simply cannot do this.
'The implementation of emergency tax for employees that do not have the correct records will considerably reduce their disposable income, post-Christmas, when households are already very stretched. The best advice for people in this position is to register on myaccount on the revenue website, if they have not already done so, and update their records as soon as possible as it is incumbent on them and not their employer to do so. Those people that are paid monthly still have time to make sure their salary is correct by updating myaccount before the end of January.
'We would also advise employers against making irregular payments to staff such as loans and subs to cover any shortfall as the PAYE return would then be technically incorrect, opening organisations up to penalties for making incorrect returns.
'Revenue has budgeted a collection of an additional €50m from PAYE modernisation, so our advice to employers is to ensure they keep their employees up to date but also to implement the system correctly to ensure they are not a contributor to that considerable tax figure.'
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ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com