Close to half a million taxpayers are owed refunds of millions of euro in what could prove to be a massive boost for consumers struggling with surging prices.
Some €313m is owed to around 481,000 taxpayers who paid too much tax last year or failed to claim a tax credit, Revenue has confirmed.
A large chunk of the tax refunds are for the new rent credit, but there is also millions of euro owed to income taxpayers covering such areas as medical expenses relief, e-worker relief, tuition fees, flat-rate expenses, the home carer credit and nursing home expenses, among others.
The average owed to taxpayers is around €650, the latest figures from the Revenue Commissioners indicate.
A number overpaid tax amounts of €1,000 last year. However, some income earners have paid too little tax.
Close to 272,000 taxpayers paid too little tax last year, and now owe a total of €99m to the tax authority. This averages out at €364 each.
Consumer tax manager with Taxback.com Marian Ryan told taxpayers to claim money they are owed. “It’s your money, go and get it,” she said.
She added that it was Revenue’s job to ensure that people are taxed correctly and if people are entitled to a tax relief or a tax credit then Revenue officials are more than happy to grant it.
“However, it is not their responsibility to hunt us down and make us claim it. We as taxpayers need to try becoming more tax-savvy and ensure that we get all the credits that we are entitled to,” she added.
Ms Ryan said people who are fearful of tax officials should seek the guidance of a specialist who can guide them through the process.
“Don’t ever assume you are not due a refund. Too many people assume that they are taxed correctly and aren’t due any refunds, and as a result are unwittingly overpaying their taxes,” she said.
Currently there is over €170m in overpaid taxes for 2019 that is unclaimed, Taxback.com said. This related to 300,000 people. That’s an average refund of €560 for each of these people who have not claimed back what they’re owed.
Ms Ryan said: “2023 is the last year that people can claim refunds for 2019 so if they don’t claim now, it will be lost to them.”
In the last few weeks, Revenue has updated each PAYE taxpayer through the Preliminary End of Year Statement.
This outlines if a person’s tax affairs are in balance, or whether they owe money to Revenue or are due a refund.
To access the statement, taxpayers log in to myAccount on the Revenue website, and access it by choosing “Review Your Tax 2019-2022”.
Revenue’s national PAYE manager Aisling Ní Mhaoileoin encouraged PAYE workers to complete an income tax return to claim tax credits for last year.
“To finalise their tax position for 2022, a person needs to complete an income tax return. The quickest and easiest way to submit the return is online,” she said.
“Revenue will have pre-populated the online return with information available to us making the return relatively straightforward to complete.”
She said completing a tax return allows an employee to claim additional tax credits such as health expenses or rent tax credit or to declare additional income.
“Once a tax return has been submitted, a statement of liability will issue shortly thereafter, setting out the employee’s final tax and USC position for the year.
“Refunds, where appropriate, will be made promptly.”
How to claim back tax
There are a number of popular ways to get money back.
Ms Ryan said: “There are a number of valuable tax reliefs and credits which people often lose out on because they’re not aware of them.
“These include the tax reliefs on medical expenses, nursing home fees and tuition fees, flat-rate employment expenses allowances, the home carer’s tax credit, the tax relief for employing a home carer, the dependent relative tax credit and rent-a-room relief. These can all be lucrative reliefs.”
Medical expenses relief
If you have paid for eligible health expenses you will be entitled to claim relief at your standard rate of tax of 20pc.
Day-to-day medical expenses – such as GP visits and prescription fees – are often overlooked but can equate to a substantial amount over the course of a year.
Taxback.com research shows that only around four in 10 Irish people claim tax relief on the cost of their medical expenses.
Flat-rate expense relief
This a type of tax relief for PAYE workers in specific trades and professions where a person can reduce the amount of taxable income they have each year on the cost of certain expenses.
The amount that can be claimed depends on the job because the rates are set by Revenue each year for various classes of employee.
A full list of jobs and associated reliefs can be found online at Revenue.ie.
Over 180 different occupations are entitled to flat-rate expenses of amounts between €21 and €2,476 per year, with an average of €247 per year.
E-worker relief
If a person works from home, they can apply for some tax relief on the cost of utilities and other expenditures that might be incurred.
An employer can make a voluntary payment to an employee of €3.20 per workday without deducting any PAYE, PRSI or USC. This payment is intended to cover expenses such as heating and electricity costs.
If you are an e-worker and your employer does not pay you the tax-free amount of €3.20 per day, you can claim e-worker tax relief instead.
Revenue will allow 30pc of your utility expenses as an e-working expense.
Cycle-to-work scheme
This was recently increased from €1,000 to €1,250, and is €1,500 for electric bikes. Taxpayers can avail of the exemption once in a four-year period.
Home carer tax credit
This can be claimed by any housewife/househusband caring for their own children.
The value of the credit for 2020 and 2021 is €1,600.
It can be claimed either if the spouse is at home full time, or if the spouse works part time and earns less than €10,400 (if they earn between €7,200 and €10,400 they will get a portion of the tax credit).
Tuition fees
If you are paying tuition fees for a full- or part-time third-level course, be it for yourself or for your child, you may well be entitled to tax relief on the cost.
Rent-a-room relief
When someone lets a room in their sole or main residence as residential accommodation, the income may be exempt from income tax where the gross rent received is below €14,000.
Rent tax credit
The rent tax relief is worth up to €500 a year and up to €1,000 a year for married couples and civil partners. It has been introduced to help ease the pressure of record highs in the cost of accommodation.
Around 400,000 people are eligible for the credit. To claim it, sign in to myAccount on the Revenue website. Go to the PAYE Services section.
Click Review your Tax 2019–2022 and select 2022. Then click Request under the Statement of Liability section. Once there, click on Complete your Income Tax Return.
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