Farm Ireland

Sunday 18 February 2018

Tax man: 10 ways to find some relief in your tax bill

Michael Hough

The deadline for tax returns is on top of everyone at the moment. Unfortunately, in the fuss to get everything across the line on time, many forget about looking into that tax credit or tax relief that they heard about somewhere but never quite got around to finding out if it would be of any benefit.

But don't worry. The good news is that even if you have already lodged your tax return with Revenue and have omitted to claim a particular tax credit or relief, you can still claim it up to four years after the tax year involved.

What kind of credits are we talking about? Most people are familiar with the basic tax credits -- married, single, widowed, etc. But the following 10 reliefs and credits are much less well known, but are useful in minimising your tax bill.

  • Donations to Charities: Relief is available to individuals for donations to qualifying charities, listed on the Revenue website.

There is no relief for donations to any one charity in a year of less than €250. For self employed individuals the relief is simply allowed as a deduction in calculating his/her income tax due for the particular year.

In simple terms, that means it is 100pc deductable. For individuals in the PAYE system, the relief is granted in a much more complicated way which is more beneficial to the charity.

  • Third Level Tuition Fees: This relief is available at the standard rate (20pc) in respect of third level tuition fees paid to approved colleges subject to an annual limit of €5,000 @ 20pc (these fees should not be confused with registration fees for which there is no tax relief).

In general terms approved colleges are universities and institutes of higher education in the State or in another EU country and some universities outside the EU. The relief is available to the person who pays for the course regardless of the relationship to the student.

  • Training Courses: Relief is available here at 20pc in respect of tuition fees ranging from €315 to €1,270 for certain courses in information technology and foreign languages.
  • Service charges: Relief is available at 20pc again in respect of charges paid in full and on time for services provided by a local authority or a private collector where domestic refuse collection is involved.

The relief is allowed on the basis of the charge paid in the preceding year and is subject to an upper limit of €400.

  • Permanent Health Insurance: 100pc relief is available for premiums paid under a Health Insurance Scheme which has Revenue approval and provides payments to an individual in the event of the loss or reduction of income resulting from ill health.
  • Dental Insurance: Relief is available at 20pc in respect of premiums paid to an authorised insurer for non routine dental treatment.
  • Donations to sports bodies: Since May 1, 2002, tax relief is available for donations to sports bodies for the funding of capital projects. Any donation to a sports body of €250 or more is 100pc deductable but there are some conditions. It must be made to the body for the sole purpose of funding the approved capital project.

The donor or any person connected with him/her must not be entitled to any benefit whatsoever as a consequence of making the donation.

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  • Trade Union Subscriptions: A tax credit of €70 is available in respect of subscriptions paid to a trade union.
  • Employee Tax Credit (PAYE Credit): The maximum credit is €1,830 and in general is available to individuals whose income is within the paye system. It is also available in respect of certain pensions paid by the Dept of Social Protection including the Old Age Contributory Pension and Survivors Pension. It also applies to Social Security Pensions paid by other EU member states.
  • Home Carer's Tax Credit: A tax credit at 20pc is available for married couples where one spouse works in the home caring for one or more dependent persons.

This could be a child for whom they are entitled to Social Welfare child benefit, a person aged 65 or over, or a person who is permanently incapacitated by reason of mental or physical infirmity and the qualifying person normally resides with the couple for the year.

If not living with the carer the qualifying person must live within 2 kilometres from the carer and there must be an appropriate communication link between them.

The main condition is that the home carer's income is not more than €5,080. A reduced tax credit applies where the income is between €5,080 and €6,880 in 2009 or 2010.

The tax credit is not available to married couples that are taxed as single persons.

Michael Hough is a tax consultant with accountancy firm Owen Sweetman & Co in Balbriggan, Co Dublin

Irish Independent