Kieran Coughlan: Revenue’s online system brings complex challenges

Employers, including those operating farms, have been burdened with Revenue changes which came into effect on December 5.

Revenue have now changed their way of processing new employees.

Up until now, an employer taking on a new employee who had not previously worked (such as farm students) had the ability to present these employees with a two-page form called a 12A which — when it had been completed and forwarded to Revenue — resulted in a certificate of tax credits being generated for the employee and a P2C generated for the employer.

In practical terms, this was a relatively simple system which could be in essence be controlled by the employer.

Now, the onus rests with the employee to register with Revenue’s “Myaccount” system, which enables that employee notify to Revenue of their new employer and to allocate tax credits accordingly.

Of course, Renenue’s move to online processing has generally been welcomed by both businesses and accountants allowing or quick, efficient and accurate communication with Revenue.

However, this departure which now requires employees to take on responsibility for registration could ironically result in much more administration for the employer, as well as potential exposure to tax.

This basic change in tack by Revenue will also affect those employees who are starting a second or subsequent job.

An employer will — under the new system — request an employee to undertake their own registration.

The employee may delay fulfilling their responsibilities, meanwhile an employer who operates PAYE on the assumption that tax credits and tax band are to be allocated could find themselves short changed where the employee subsequently leaves without fulfilling their obligations.

Furthermore, in the case of part-time and seasonal work, often undertaken by students, it can mean the practicalities of getting up and registered in good time can be impractical.

Meanwhile, an employer who is taking on a new employee who has ceased a previous employment within the same year should obtain a P45 from the previous employment in order to pick up where that previous employment left off.

All in all, the new system has added to complexities for employers while also imposing obligations on new employees who in the main have never had any interaction with Revenue, which may leading to a stalling of the whole registration process.

Meanwhile, Revenue interactions seem to be becoming Big Brother-esque — taxpayers who are dealt with under the Revenue’s large case division are, for example, now required to submit their financial statements online to Revenue in conjunction with their tax returns.

The quest for information gather has taken a new direction this week as Revenue announced their new receipts tracker mobile app, which allows taxpayers to record transactions as well as to store copies of all receipts on Revenue’s server where the Revenue app is synchronised with their system.

Any system which helps taxpayers record their receipts is of course welcome.

While there is no requirement for taxpayers to upload their receipts to the Revenue storage instead they can just opt to use the tool as a tracker, the advantage in uploading receipts though is that the requirement to retain physical hardcopies is now done away with.

However one factor which taxpayers might feel uncomfortable about is that Revenue can check your receipts without contacting you directly to verify claims or refunds. In some ways, this just seems like an invasion of privacy.


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