Taxpayers to lose out on an estimated €420m
More than one million PAYE workers are estimated to not be claiming back tax credits on medical expenses, bin charges and trade union subscriptions.
Revenue said on average €380 was handed back to each person who made a claim last year.
However managing partner with McGuireDesmond Solicitors, Ciaran Desmond, said a “sizeable number” of Irish taxpayers are still not claiming their full reliefs and entitlements.
“Every last cent counts in the current economic environment with interest rates rising and tighter constraints on borrowing and one of the easiest ways to waste money is by not claiming the tax credits and allowances that you are entitled to,” he said.
A spokeswoman for Revenue said that in many cases people will automatically be granted the tax credits and reliefs they are entitled to but in some cases they will have to inform Revenue of their entitlements.
“Over the last five years the number of people claiming reliefs has trebled. The huge growth in claims is a clear indication that our efforts to inform people of their entitlements, over many years, have been successful,” said a Revenue spokeswoman.
It said people don’t have to send receipts but must keep them for six years in case Revenue requests them in the future.
According to taxback.com it filed three times more claims in 2009 than it did in 2007.
Taxpayers can claim tax back for up to four years so claims can be made in 2010 for the 2006, 2007, 2008 and 2009 tax years.
The average refund received by taxback.com clients over the four-year period to 2008 was €636 a year, with the average claim for 2008 being €840.
Tony McGinty of McAvoy and Associates said: “The key to saving tax is to be both methodical and timely. By preparing your tax return and taking the correct advice in plenty of time your chances of reducing your tax bill will be greatly improved.”
Last year Revenue paid back €102m on medical expenses, €44m on rent and €4.2m on trade union subscriptions.
If you paid a subscription for trade union membership you are entitled to a tax credit. The maximum relief for 2009 is €350 at 20%, which gives a tax credit of €70. In 2009, Revenue will credit trade subscriptions automatically.
Tax relief of up to €1,000 is available for tuition fees paid in respect of certain courses which have been approved by Revenue.
Tax relief is available for annual bin charges paid during the previous year, eg in 2009 you can claim relief for bin charges paid in 2008. Relief is given at the standard rate of tax, which is currently 20%. Tax relief is also granted at 20% on the cost of bin tags (pay per use) purchased in the previous year. The maximum amount on which you can claim relief is €400, which gives a tax credit of €80.
If you maintain at your own expense an incapacitated relative/in-law, a widowed parent/parent-in-law, or a child who lives with you and on whom you are dependent due to old age or infirmity, then you are entitled to a tax credit of €80 in 2009, but no credit is due if your relative earns more than €13,837.
Individuals who live in rented accommodation are entitled to a rent credit which for 2009 is a maximum of €400 for a single person aged under 55 or €800 for a married couple/widowed person aged under 55. The amounts double for those aged over 55.
If you got married half way through a year, you could be entitled to a tax refund, especially if one of you earns a lot less than the other.
However, if you and your partner each earn a similar wage, there may not be much to be gained by paying your tax as a married couple, rather than individually.
Also married couples, where one spouse works in the home caring for their children, can claim an additional tax credit of up to €900 in certain instances, and parents in one-parent family situations who have qualifying dependent children can claim an additional credit for 2009 of €1,830. Similar claims can be made for previous years.
Health expenses that qualify for tax relief include doctors’ bills, treatment at a hospital or nursing home, X-rays, transportation by ambulance, maternity care, prescription medicines, physiotherapy, treatment of eye problems, corrective laser eye surgery and food and drinks required by coeliacs, or those on specialised diets on the advice of a doctor.
You may claim for yourself, your spouse, your children and anyone else on whose behalf you have incurred health expenses. Prior to 2007 you could only claim for yourself and certain relatives.
Individuals can claim tax relief on all qualifying health expenses and the refund is calculated at the standard rate, currently 20%.
Routine dental treatments, such as extracting, filing and scaling of teeth do not qualify for relief but certain procedures, such as crowns, veneers, bridgework, root canal treatment, and treatment of dental irregularities are allowable.
You can claim this tax credit if you are a single parent with a dependent child living with you for all or part of the year. It is not available to unmarried couples living together as man and wife. In 2009 the tax credit was €1,830. To claim this tax credit, contact your local tax office.
You can claim this if your child is permanently incapacitated and living with you at any time during the year. In 2009, a tax credit of €3,660 was given for each qualifying child. To claim this tax credit for the first time write to your tax office and include a doctor’s certificate.
Individuals working in certain industries are entitled to a flat rate or general expense deduction which can be offset against their tax bill. For example, in 2009 airline cabin crew members were entitled to an expense deduction of €64, bus, rail and road operatives in Bus Atha Cliath, Bus Éireann and Iarnród Éireann were entitled to a deduction of €160, and those working in the carpentry/joinery trade were entitled to a deduction of €220.
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