Time running out to claim tax refund bonanza

PAYE taxpayers have been warned not to miss out on millions of euro in tax refunds before the end of the month.

New tax rules which take effect on New Year’s Day mean many taxpayers, who are entitled to refunds for medical and other qualifying expenses, will no longer be able to get their hands on money due to them.

Taxpayers need to move quickly to get refund claims in before December 31, the group representing tax advisors said yesterday.

Irish Taxation Institute chief executive Mark Redmond said anyone who incurred qualifying expenses before April 2000 should lodge claims immediately.

“Taxpayers should consult the Revenue website, www.revenue.ie, which gives full details on how to make the claim and lists the main expenses that might give rise to overpayments,” he said.

Many taxpayers are unaware they can claim tax relief on medical bills, non-routine dental treatment, rent and third-level fees. A person who incurred €500 in repeat visits to a doctor or specialist over the course of a year, for example, could be entitled to a tax refund of up to €200. A taxpayer who paid over €2,000 in third-level fees could expect a refund of €400. Relief is available for medical bills paid on behalf of an elderly relative in certain nursing homes.

Until recent changes to tax law, claimants had up to 10 years to submit applications to the Revenue Commissioners if they discovered they were eligible for tax relief, but had failed to seek a refund. From New Year’s Day, Revenue will only pay out on claims for expenses incurred in the last four years.

The new rules could also affect homeowners who took out mortgages more than two years ago. Tax relief on interest payments is available to mortgage holders, but this has only recently been applied at source.

“Taxpayers should now urgently review their tax affairs for the period from 6 April 1994 to 5 April 2000,” Mr Redmond said. “If they believe they have overpaid tax, they should make contact with Revenue before 31 December.”

PAYE taxpayers are more likely to have missed out on money due to them because, unlike self-employed people, they leave management of their income tax affairs to their employers.

Revenue said the change was brought in as part of a package to improve administration of the tax system and would affect a relatively small percentage of taxpayers. The changes were approved by the Dáil in early 2003 and also restrict Revenue’s right to query an individual’s tax affairs. The new regime means Revenue can only look back over the last four years, except in cases where fraud or negligence is suspected.