Specialist
Payroll is constantly changing and evolving to meet the guidelines set out by Revenue and 2019 has seen some big changes with the introduction of PAYE Modernisation.
Below are some of the more significant changes that may be relevant to you.
Updated RPNs
Due to an increase in DEASP payments, employers should expect an increase in RPNs from April 8th. These will relate to the following:
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Pension - The maximum personal rate of pension will increase by €5 per week.
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Social Welfare - There will also be a €5 increase for weekly recipients including carers, widows, people with disabilities, lone parents, job seekers, Maternity and Paternity Benefit recipients, Farm Assist recipients and Community Employment participants.
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Dependent Children - Increased weekly payments of €2.20 for dependent children aged under 12, and €5.20 for dependent children aged 12 and over.
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Working Lone Parents - Anyone receiving the One Parent Family Payment and Jobseeker’s Transitional Payment will now be able to earn an extra €20 per week, up to €150, and keep their full payment.
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Working Family Payment - People in receipt of maintenance will benefit from a new disregard of €95 per week in respect of housing costs.
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Fuel Allowance - The weekly Fuel Allowance of €22.50 is being extended by one week this year until 12 April.
BIK on Accommodation
Where accommodation has been made available by an employer to his or her employee for private use, a benefit in kind provision applies. This BIK applies regardless of the employee's wage and also takes into consideration the benefits provided to an employee’s/director’s spouse, civil partner, family, and children of a civil partner.
The value of the taxable benefit is determined by:
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The annual value of the use of the accommodation, and
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Any expense (other than the cost of acquisition) incurred by the employer in connection with the provision of the accommodation, such as the cost of light and heat.
Road Hauler Subsistence Rates
An Agreement was reached between Revenue and the Irish Road Haulage Association (IRHA) in respect of the conditions and guidelines covering the reimbursement of subsistence allowances free of tax by road haulier firms (employers) to road haulier drivers (employees). Where an employee’s allowable expenses are reimbursed free of tax by an employer, the question of an income tax claim by the employee for those expenses does not, of course, arise. Alternatively, employers can reimburse employees for actual receipted expenditure incurred. Where the amounts reimbursed by employers are in excess of the amounts referred to in the table, the excess is subject to tax, USC and PRSI in the normal way.
Earned Income Tax
Due to increases in Budget 2019, the earned income tax credit will increase from €1150 to €1350. This is different from the employee tax credit as it only applies to those who are self-employed. Those who are able to claim this credit are:
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A proprietary director
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A spouse or civil partner of a proprietary director
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A child of proprietary director
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Being in receipt of trading profit or other foreign income.
Travel Expenses for Non-Executive Directors
Amendments to the Taxes Consolidation Act (TCA) introduced specific exemptions for travel and subsistence expenses incurred by non-executive directors where certain criteria are met. These are:
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Irish resident non-executive director - The travel and subsistence expenses must have been incurred for the purpose of the non-executive director’s attendance at a relevant meeting in the State where the payment does not exceed €5000 per annum.
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Non-resident non-executive director - The expenses must have been incurred solely for the purposes of attendance by the director at any meeting conducting the affairs of the company.
Where the above exemptions do not apply, the general statutory position in relation to the tax treatment of expenses of travel, which are paid or reimbursed by a company to a director, applies. Comprehensive guidance material on the tax treatment of expense of travel can be found in Tax and Duty Manual Part 05-01-06.
Share Schemes
Following the introduction of PAYE modernisation, there have been some updates to the filing obligations in relation to share schemes. Employers are required to report:
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The day the taxable benefit arises, or
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The earlier of the next payday or 31 December in the year.
Employers should, in the absence of a precise valuation, include the best estimate of the value of the benefit involved and include that amount in the relevant payroll submission to Revenue. When the precise value of the benefit becomes available, any adjustment should be included in the next payroll submission to Revenue.
Low Pay Commissions Review of Practices re Tips and Gratuities
The Low Pay Commission was asked to examine current practices, including whether legislation might impact negatively in tax or financial terms, upon either employees or employers.
The Commission concluded that:
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Insufficient reliable data exists to prove that the issue of employers withholding employee tips is a significant problem in Ireland,
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Legislation or regulation should not be introduced in this area as the administrative and compliance costs involved would not be justified, and
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Legislation in this area may not be enforceable.
By Sarah Brown of Paycheck Plus.