Taxpayers owed millions, State finds

PAYE taxpayers are owed hundreds of millions of euro by the Revenue Commissioners in unclaimed medical expenses, bin charges, VAT rebates, and rent allowances, an Oireachtas Committee heard yesterday.

A survey last year by the Irish Taxation Institute revealed that up to €50 million per annum in medical expenses may not be paid because taxpayers have not claimed for the rebate to which they are entitled.

Later last year, Revenue estimated unclaimed refunds at €100m.

Yesterday, the committee heard of other areas in which refunds were not being claimed, which suggest the actual amount owed could be far higher.

And in another development, Labour’s Joan Burton claimed the phone system at the Revenue Commissioners was at “breaking point.”

“The system is not able to cope with the volume of queries. I know that for small and medium enterprises and for employees, getting through has become a nightmare,” she said.

In relation to unclaimed rebates, Fine Gael deputy leader, Richard Bruton, highlighted nursing home charges. His own calculation, he said, was that €600m a year was being spent by taxpayers on private nursing homes but a substantial number of those were not claiming tax relief.

“If those people are paying at the higher 42% rate, then that is massive,” he said.

He also pointed out that the official figures for people claiming tax refunds for rent paid to private landlords was much lower than the real number who were renting.

Committee chairman Sean Fleming said Revenue may owe substantial sums — perhaps up to €40m — to consumers for VAT wrongly applied over many years to the professional fees of opticians.

Several committee members, including Kildare North Independent, Catherine Murphy, also raised the issue that many people were unaware — and were not making claims — of reliefs for bin charges.

The committee had invited the Irish Taxation Institute (ITI) and the Consumers Association of Ireland to make presentations on the under-claiming of allowances and reliefs by taxpayers.

Consensus emerged that the process for claiming tax reliefs was over-complicated and placed too onerous a burden on ordinary taxpayers.

ITI representative Cora O’Brien said that the tax forms and processes needed to be simplified.

PAYE tax: Breaking it down

* One in two PAYE taxpayers do not understand the tax system (one million people)

* 50% of taxpayers are not claiming tax relief on medical expenses

* 55% of taxpayers are not claiming tax relief on bin charges

* 89% believe there should be an organisation to look after the ordinary taxpayer

* 88% are not afraid to engage with the Revenue about tax

* 72% prefer human contact to help answer their queries

* 37% of taxpayers do not understand tax certificates

* 35% of PAYE taxpayers do not understand all the information on their P60.

* Two in five (42%) taxpayers leave their tax affairs to their employer.

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