€219 million in underpayments owed to Revenue, but how do you utilise your taxes to minimise it? 

Revenue have contacted some Irish taxpayers this week, requesting them to complete an Income Tax Return for the tax years not filed between 2019 -2021. Revenue is requesting that taxpayers address this matter by the end of October 2022.

A combined total of €219m is owed to Revenue from 280,000 taxpayers who received the PUP & TWSS payments through COVID19. Some people will owe up to €2,500 and others will owe less than €1,000. The underpayment is dependent on whether you returned to work in 2020, on the same salary as pre-COVID.

Revenue is contacting taxpayers and requesting that under Section 879 of the Taxes Consolidation Act, 1997 they complete and submit an Income Tax Return, for any years where a return has not been already filed.

Revenue also adds that where an underpayment occurs, they will ‘minimize any hardship’ by automatically collecting the underpayment via future tax credits over a maximum period of four years.

This means Revenue will allocate a portion of your tax credits towards the underpayment and collect the liability through the tax you pay in your salary over four years. The other options are to contact Revenue and make a full or partial payment of your underpayment. Some taxpayers may be unaware that if you fully utilise your tax credits it may be possible to eliminate, or significantly reduce any underpayment.

Gerry Scully, an Accountant with Irish Tax Rebates said:  

“People who are receiving these notifications about underpayments may be unaware of tax credits they are entitled to claim.  Claiming these extra tax credits will help to reduce or eliminate the underpayment. There may also be overpayments of tax in some years that remain unclaimed and if there is, these overpayments can offset against the underpayment”.

Irish Tax Rebates recommend carrying out these 6 Tax Tips:

  1. Apply for all tax credits available to you, for example, medical expenses, Single Parent Child Carer Credit (SPCCC), Working from Home tax credit or Dependent Relative tax credit.
  2. Ensure that the correct flat rate for your occupation is on your profile.
  3. If you are recently married, investigate if Joint Assessment of you and your spouse’s taxes could be another avenue to reduce or even remove your underpayment.
  4. Recently unemployed or leaving Ireland? – Your potential tax refund will not offset against the underpayment- but could be used to make a payment to the Revenue to reduce or remove your underpayment.
  5. Submit a tax return for the past four years and use any potential tax rebate to offset the underpayment.
  6. Consider additional contributions to your pension pot. Tax relief on pension contributions can be used to offset any tax underpayment.

Irish Tax Rebates will carry out a full review of your taxes over the past four years, free of charge to help minimize the effect of your underpayment. If Irish Tax Rebates obtain a tax refund, we will forward this refund less our fee to the client. The client can then in turn utilise this refund to reduce or possibly eliminate their tax underpayment. We offer a no rebate, no fee policy, and if you do receive a rebate, we will charge a 7% + VAT fee or a minimum charge of just €23. If you have received a letter from Revenue, you’ve nothing to lose by applying to Irish Tax Rebates for a free full review of your taxes. For more information on our services, click here.

Building Industry Tradespeople Flat Rate Expense

Includes:  Bricklayers, Fitter Mechanics, Plasterers, Electricians, Mason, Roofer Slater, Tilers, Floor Layer, Stone Cutter, Drivers, Scaffolders, Sheeters, Steel Erector, Surveyors, and General Operatives. All professions can claim up to €280 on flat rate expenses over a four-year period for items necessary to complete their work.

This is a flat rate expense and can be claimed for in your tax reviews for the current/previous years for 4 years, currently taxpayers can claim for 2018-2021, and in January they will be able to claim 2019-2022. Just a little bit of background if anyone asks about the advert for our service as I’m sure it’s a little out of place compared to usual adverts in your newsletters. Other flat rate expenses and claimable tax reliefs can be found on our website. https://www.irishtaxrebates.ie/

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