Friday, January 31 17:25:55
The implementation of the new Single Euro Payments Area (SEPA) Direct Debits is having an impact on the timing of certain monthly Exchequer receipts, the Department of Finance warned today.
SEPA is a European Union regulation that will simplify financial transactions and make doing business easier across the EU. It applies in 33 European countries, including Ireland, and will make it easier to transfer and receive funds.
However, the implementation of SEPA Direct Debits is having an impact on the timing of certain monthly Exchequer receipts, the Department warned.
For certain taxes (Relevant Contracts Tax, Employer PAYE and PRSI, VAT and Corporation Tax) Revenue's Online Service (ROS) pay and file due date is the 23rd of January. Previously, ROS tax collections via direct debit were subject to a 2/3 banking day cycle from the due date to the date the money is received by the Exchequer.
Under SEPA, the first presentation of direct debits will take 7 banking days to process resulting in some receipts being delayed from January 2014 to February 2014.
As such, end January Exchequer figures will be down in year-on-year terms. However, this is a technical timing issue and does nothing to alter the tax forecast for the year.
Looking beyond the initial introduction phase, a standard 4 banking days will be required for processing payments on recurring direct debits thereafter. This means that as the year progresses, the impact of SEPA on Exchequer tax receipts will be of a much lesser magnitude.