The deadline for employers to submit the P35 payroll return for 2017 is the 15th February 2018. This is extended to the 23rd February 2018 where both the return and balancing payment are made through Revenue’s Online System (“ROS”).
Preparing P35 return
The vast majority of payrolls are maintained on a computerised payroll package. These software packages should be able to produce the end of year P35 reports and also create a file which can be uploaded to ROS.
Before uploading the P35 to ROS the total figures should be compared to the monthly P30 returns submitted to confirm they agree.
If monthly direct debits are submitted the balancing payment/refund due should be calculated. In order to remain on the monthly direct debit system the total direct debits should total at least 90% of the total liability for the year.
The P35 return details the following information:
- Gross pay and taxable pay of each employee
- Tax, USC and PRSI deducted for each employee
- Start date and end date of employee (if applicable)
- PRSI class of each employee and number of weeks pay under each PRSI class
- Benefit in Kind (“BIK”) (e.g. medical insurance, company car, etc.) provided to employees
- Number of employees contributing to a pension scheme and total amount contributed to pension
BIK computations should also be reviewed and any adjustment required (e.g. business mileage for BIK on company car) should be carried out before the final P35 return is filed with Revenue.
All staff who were in employment on the 31st December 2017 should also be issued with a summary of their pay and tax for 2017. This is known as a P60 form. Again, these forms are usually produced by the payroll software.
When an employee joins a business the employer is required to notify Revenue either by submitting the employee’s previous employment details (P45 from previous employer) or where the employee does not have a P45 by submitting a P46 to Revenue. Both of these returns can be filed through ROS.
During September 2017 and October 2017 Revenue notified a large number of employers about employees who were appearing on the annual P35 return but which do not appear on the employer’s employee listing (P2C). This is the list of employees that is downloaded from ROS which details each employees’ tax credits and bands to apply in their payroll calculations.
The P2C list should be reviewed and the employer should notify Revenue of any employees who are not on this list.
Also, any employees who have ceased employment should be issued with a P45 before the P35 is filed with Revenue.
Please contact us if you require any assistance with your payroll calculations or returns.