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Are you ready for the new bank transfer system SEPA?

The Single Euro Payment Area (or SEPA for short) is an EU regulation that will simplify financial transactions and make doing business easier.

It will apply across 32 European countries, including Ireland, and will make it easier for you to transfer or receive funds. SEPA will mean that you can make and receive payments seamlessly, collect a direct debit on any euro account or make a credit transfer to any euro account within SEPA.

Your business must be SEPA- compliant for all non-urgent euro credit transfers by the 1st February 2014 deadline.

All existing national credit transfer and direct debit schemes must move to the SEPA credit transfer and direct debit schemes by the deadline of 1st February 2014. IBAN and BIC codes will replace national sort codes and account numbers for all euro electronic payments. IBAN and BIC details are generally included on bank statements.

All euro direct debits and credit transfers will be executed under the same conditions. This will create a more efficient borderless payment area by standardising euro electronic payments.

Main Changes

1. Existing national payment schemes will be closed down,following which euro electronic payments will be processed through the new SEPA schemes.
2. All national direct debits and credit transfers must be SEPA compliant.This includes everything from staff payroll to paying creditors or receiving a euro electronic payment from customers within SEPA.
3. National sort codes and account numbers will be replaced byan International Bank Account Number (IBAN) and a Bank Identifier Code (BIC).

Direct Debit with SEPA

With SEPA direct debit, you can collect payments in euro from domestic and cross-border debtors. There are a number of important business changes:

1. New file submission time frames.
2. New customer file formats.
3. New automated process for rejected/returned transactions.
4. Increased consumer protection rights.
5. IBAN and BIC will replace national sort codes and account numbers.

Credit Transfer with SEPA

With SEPA credit transfer, you can make euro electronic payments to domestic and cross-border beneficiaries. There area number of important changes:

1. Payments and reconciliations are simplified by using a single automated system.
2. New customer file formats.
3. IBAN and BIC will replace national sort codes and account numbers.

Can I Ignore SEPA or do Nothing?

All businesses must be ready for SEPA, as all existing national systems will close on 1st February 2014. You will need to ensure that your payroll, direct debit and accounting systems are SEPA ready before 1st February 2014 so that you are able to make euro electronic payments after that date. A key benefit for businesses is that faster settlement and simplified processes will improve cash-flow and potentially reduce cost.If you don’t act before 1st February 2014, then you will not beable to make electronic payments!

What do I Need to Do?

Contact your bank as they will be able to advise you on any actions that you need to take to make sure that you are fully SEPA-compliant for the 1st February 2014 deadline.

How Can Irishtaxback.ie Help?

If we provide payroll services to your business, we have updated our payroll software to facilitate the new SEPA requirements. If you process your own payroll, you must contact your bank immediately.

Have you considered outsourcing your payroll to Iristhaxback.ie ? Talk to Elma today to see how we can take care of your payroll requirements.