Farmers face 'unworkable' tax overhaul for farm labour

Revenue (stock image)
Revenue (stock image)
Ciaran Moran

Ciaran Moran

Calls have been made for farmers to be exempted from key changes to the PAYE system set to come into force next January.

Revenue is describing it as PAYE modernisation which will involve the most significant reform of the system since its introduction in 1960.

As part of the changes, employers will need to calculate and report their employees' pay and deductions online as they are being paid which will end the more flexible practices engaged in by many employers currently.

Revenue says that it will make it easier for employers and employees to ensure that the correct tax is deducted and paid at the right time.

Revenue also says that the new system will improve the streamlining of current business processes and will reduce the administrative burden currently experienced by employers to meet their PAYE reporting obligations.

However, Mayo Sinn Féin Senator Rose Conway-Walsh has said the changes are unworkable for small farmers. 

“Having to report any payments made to spouses, sons or daughters or casual labour in real-time is going to cause huge challenges for farmers. 

“Firstly, many farmers in rural Ireland do not have access to broadband or may not have a computer or the necessary skills so asking them to upload details before a payment is made is unrealistic,” she warned.

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Traditionally, those helping out on the farm could be allocated a payment when grants were received and that could be included as normal expenditure. 

Now, gross payments would have to be made and casual labour treated as employees. 

“For instance, if a farmer has to go to a hospital appointment or is hospitalised, any person who is engaged to help out has to be classed as an employee, uploaded onto a system, and reported to revenue in real-time,” the Senator said.

She also warned that there may also be implications for young people trying to avail of SUSI grants to go to college where students are given a payment to help out on the farm. 

“Additionally, I can see that people on social welfare will be reluctant to make themselves available for what amounts to a day here and there in case their payments are affected and they are left without a social welfare payment to meet their bills.”

Key changes

'Real-time' reporting

The new system will require 'real time' reporting (as it happens) for all employee payments being made from 1 January 2019.

This will require employers or their accountants/agents to review their current business processes and practices so that they meet the new requirements.

The old Tax Deduction Card will disappear and will be replaced by the Revenue Payroll Notification (RPN). The P45, P60 and P35 will also disappear.


PAYE Modernisation will change how employers report their payroll information to Revenue. Every time an employee is paid, be it monthly or weekly, a file will need to be submitted (electronically) to Revenue, consisting of all details of employee payments and deductions.

Monthly Statements

Revenue will issue a monthly statement to the employer with the total amount deducted or repaid of Income tax. USC, PRSI and LPT (if relevant). If the details are wrong, you will have to correct the statement and submit the corrections to Revenue before the return due date. The statement will automatically become the return for the period.

Returns and payments

Returns must be made on a monthly basis but payment can continue as currently, be they monthly or quarterly. The return and payment due dates are 14 days after the end of the month or quarter as the case may be. There will be a provision for variable monthly payments by direct debit and the Collector-General will have the power to vary the payment date.

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