In taxing times: know your benefits
With the number of claims for tax relief tripling in recent years, thanks in no small part to online services, taxpayers will always benefit from knowing their entitlements, writes John Cradden
Those lucky enough to still be in a job are paying thousands more euro in tax to the Revenue because of the last three budgets of Finance Minister Brian Lenihan
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A FEW years ago, relatively few of us could be bothered to claim our tax credits and reliefs. But today it's a very different story.
According to the Revenue Commissioners, there were 1.4 million claims for tax reliefs last year, more than three times the number in 2004 (around 402,000).
While it is certainly a reflection of the current economic situation, a spokeswoman credited much of the increase in claims to the growth in the numbers using the Revenue's PAYE Anytime service, which enables employees to manage their own tax affairs online (see panel).
There are no hard figures on how much in tax relief goes unclaimed every year, but it is generally assumed to be millions of euro.
Consumer and tax experts say now is a good time to start claiming any tax reliefs due to you.
Over the past couple of years, some reliefs have been abolished, while others have been scaled back. But you can still claim for tax reliefs for any expenditure made as far back as 2006.
"For most tax reliefs, a claim may be submitted retrospectively, but such claims are generally limited to a four-year look-back period," says Elaine O'Gara of the taxation services unit at Deloitte.
This means that you can submit a claim for tax relief relating to expenditure which took place during the tax years 2006, 2007, 2008 and 2009, as long as the claim is submitted before December 31, 2010.
"The reliefs and credits available for things like tuition fees, service charges, medical expenses, home carers and so on can lead to a sizeable refund of income tax over the four-year look-back period," says Ms O'Gara.
Medical expenses
You can claim relief on most medical expenses, such as doctor or consultant fees and prescribed medication. There are some exceptions, such as routine visits to the dentist or optician.
In the October 2008 emergency budget, the Government announced a reduction in medical expenses relief from 41pc to 20pc from 2009.
"There has been a substantial increase in such claims over the last few years," says Cathal Maxwell of Paylesstax.ie.
"When you combine the reduced tax relief, the increase in the monthly ceiling for prescribed drugs and the excesses operated by the medical insurance companies, the overall combination of these changes means medical bills will cost more."
Service charges
It was recently announced that tax relief on domestic service charges, such as bin collections, are to be abolished from 2011 onwards.
However, you can still claim back relief on any waste, water and sewage service charges paid to a local authority or private operator from 2006, and of course you will still be able to claim relief for 2010 next year.
You can claim 20pc relief on such charges up to €400 a year, which means an annual relief of up to €80.
Employment expenses
According to Ms O'Gara, "flat-rate" expenses are "typically overlooked" by many workers.
A standard flat-rate expenses allowance is available for various classes of employee, ranging from around €30 up to €700. For example, airline cabin crews are granted flat-rate expenses of €64 per year for the cost of maintaining their uniform or work clothes.
Rent relief
If you are a tenant in private, rented accommodation and aged under 55, you can claim 20pc relief on up to €2,000 of rent that you paid during the year, which means you could get up to €400 back, or €800 for a couple.
The limit doubles to €4,000 per person if you are over 55, which means up to €800, or €1,600 for a couple.
Tuition fees
You can claim back tax relief at 20pc on fees paid for third-level courses for your children as well as for yourself or your spouse. The maximum relief on such fees is limited to €5,000 a year, which means you could get back up to €1,000 in any one year.
Home carers
If you or your spouse cares for a dependent person in your own home, you and your spouse can get a home carer's tax credit of €900 as long as the carer earns no more than €5,080 a year and you are jointly assessed for tax.
If the carer earns no more than €6,880, then this credit is reduced.
Trade union subscriptions
If you are a member of a trade union, you can claim relief on membership subscriptions up to a maximum of €350 a year at the standard 20pc rate, which equates to about €70.
Tax relief at source
Relief for private health insurance premiums and mortgage interest for first-time buyers are usually applied at source.
This means that your lender or insurer will reduce your mortgage repayments or insurance premiums by the amount of tax relief you are entitled to each year.
Irish Independent
