‘This system is capable of driving a lot of smaller operations out of business’

Cllr John Francis Flynn: jobs could be lost

FEARS have been expressed that jobs could be lost as a direct result of PAYE modernisation proposals with plans to introduce changes to the way self-employed people and smaller companies report their employees’ payroll information to Revenue.

The changes, due to come into force on January 1, are likely to result in massive costs to smaller companies who utilise the services of an accountant or an agent to operate their payroll and to ensure income tax, PRSI and USC payments are correct, a Kerry councillor has claimed.

Cllr John Francis Flynn said the real time payroll system will make life significantly more difficult for the self-employed or small operations who currently rely on financial advisors to ensure their payroll systems are properly maintained.

“At the moment an employer might need to touch base with their accountant every two months or so but with this system they will have to consult them every time a worker is paid. It’s going to cause chaos,” Cllr Flynn warned.

A sample of the PAYE changes letter being issued by Revenue

He said there is also a danger that accountants might not be able to cope with the influx and they will have to take on more staff which, in turn, will add to the charges being passed on.

Smaller operations will also have to splash out to upgrade payroll software, he added.

“This system is capable of driving a lot of smaller operations out of business as it could treble the fees they have to pay their accountants,” Cllr Flynn added.

He said he believes the vast majority of the self-employed or smaller businesses are not aware of what the change actually means or the financial implications it will bring.

“I’ve been talking to a few local accountants and they believe people aren’t even aware of the change. They might have received letters from Revenue but they might not understand what it means,” said Cllr Flynn who asked for a little more flexibility for smaller businesses.

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