Part 2: Important Year End items for employers/pension providers
The below is Part 2 of some of the important items Revenue have issued notice about for Year End that you should be aware of. Also see Part 1.
- Employer obligations when hiring an employee
- Taxation of Illness Benefit and Occupational Injury Benefit from 1 January 2018
- DEASP to cease issuing Illness Benefit and Occupational Injury Benefit Notifications to Employers/Pension Providers
- Changes to Form P45 for 2018
First ever employment
An employee who has never worked before in the State must register with Revenue so that the correct amount of tax and USC will be deducted from their wages. It is an employee’s responsibility to register with Revenue using myAccount (selecting ‘ Add Job or Pensions’ in PAYE Services) if it is their first ever job in the State.
Second or subsequent employment
If an employee has worked in the State previously, he or she may have a Form P45 from the current or previous year. Payroll may use the tax credits, tax and USC cut-off points from the P45 to tax him or her on a temporary basis. Part 3 of the P45 must be completed and submitted to Revenue immediately.
If an employee has no Form P45 he or she should contact Revenue to register their job or pension using the Jobs and Pensions service in myAccount. Payroll must tax them on the emergency basis until a Tax Credit Certificate (P2C) is received.
All employees must be registered with Revenue. If they do not register their jobs themselves, then payroll must register them.
Currently employers and pension providers are required to include with taxable pay, all taxable Illness Benefit and Occupational Injury Benefit payments paid to employees/pensioners by the Department of Employment Affairs and Social Protection (DEASP).
With effect from 1 January 2018, this is no longer the case. From that date Revenue will incorporate the taxable element of Illness or Occupational Injury Benefit into employees’/pensioners’ tax credit certificates. This will have the effect of reducing employees’/pensioners’ available tax credits and/or rate bands. Their USC rate bands will not be affected.
The Department of Employment Affairs and Social Protection (DEASP) has advised that, from 1 January 2018, it will cease issuing Illness and Occupational Injury Benefit notifications to employers/pension providers. These notifications were issued to employers/pension providers to assist them in calculating their employees’/pensioners’ tax. As Illness Benefit and Occupational Injury Benefit will be incorporated into employees’/pensioners’ tax credit certificates from 1 January 2018, employers/pension providers no longer require these notifications to calculate their employees’/pensioners’ tax.
Any queries in relation to Illness Benefit payments should be directed to the Department of Employment Affairs and Social Protection. Any queries in relation to taxation should be directed to Revenue.
Jefferson will be writing a separate post on this in due course
The paper Form P45 will be updated for 2018 to remove all references to Illness Benefit. The updated paper P45 will be available to non-ROS employers from early December 2017 and can be ordered from: Email: email@example.com
The ROS version of the P45 is not changing for 2018. Where a figure is input in the Illness Benefit field a pop-up message will advise that this field may only be populated if the cessation date is before 1 January 2018.