UP TO 120,000 Irish workers may be hit with an incorrect 51% emergency tax rate as new PAYE rules come into effect, an accountants’ group has warned.

The ACCA (Association of Chartered Certified Accountants) has warned that people who are paid weekly that they are likely to lose out on some immediate disposable income as a result of the new rules. 

Revenue introduced a new online tax reporting system which comes into effect in the first pay packets of the year.

The new system sees regular reporting by employers of their data, and replaces the old system which had not been updated significantly in decades. 

ACCA said that people who have incorrect employment details, the emergency tax rate of 51% will be applied, which would mean significant immediate losses for some.

The association said this will only be rectified if employees updating their details on Revenue’s online tax platform, but that it may take a number of week for the employer to refund the full amount of tax.

“Under the old system, accountants were able to manage the PAYE system to ensure that all employees got paid,” said Stephen O’Flaherty, Chairman of ACCA Ireland.

Under the new online system they simply cannot do this.

He said that those being paid monthly “still had time” to update their information. 

‘We would also advise employers against making irregular payments to staff such as loans and subs to cover any shortfall as the PAYE return would then be technically incorrect, opening organisations up to penalties for making incorrect returns,” he said.