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Enjoy your own taxback bonanza

Millions go unclaimed each year, writes Charlie Weston

L AST month's Budget may not have provided much in the way of future reliefs for taxpayers, but the good news is that people still have an opportunity to claim the tax refund due to them from previous years.

There is still a long list of tax reliefs available to people that could result in savings of hundreds of euro but many of these go unclaimed every year either due to a lack of awareness or the apathetic nature of some people, according to tax expert Christine Keily of www.taxback.com.

"A lot of people still find filing a tax return confusing or complicated, resulting in them paying more tax than is necessary and losing out on entitlements," she said.

Revenue has made attempts to educate taxpayers about their entitlements when it comes to tax credits and reliefs.

Despite this, Ms Keily believes that there is still millions of euro going unclaimed each year.

As we are thrown head-first into another year of austerity, all we can do is try to find some light in the darkness -- and a tax refund may be just the bit of light we are looking for, she added.

"We believe one of the most important issues for people to be aware is that an individual can claim a refund of tax credits for prior years, as far back as 2008," Keily said.

The average PAYE tax refund for people who used taxback.com last year was €840.

"Now more than ever people need this money. From January 1 people can start claiming tax refunds for the 2011 year and we are urging people to get their affairs in order sooner rather than later -- start the year on the right foot financially," the tax specialist added.

Medical expenses

The rate at which tax relief can be claimed on medical expenses has been slashed from 41pc to 20pc, but the relief is still available and can be claimed on most medical expenses incurred and on qualifying dental expenses. Taxpayers still have the opportunity to claim tax relief on medical expenses incurred in the year 2008 at the higher rate.

tuition fees

The tax credit for tuition fees is still available. For the years 2008 to 2010 the maximum tax credit available was €1,000.

A change was introduced in the year 2011 where the relief does not apply to the first €2,000 of qualifying fee or if less, the full amount. Qualifying fees are capped at €7,000, so the maximum credit available is still €1,000 although taxpayers will have to incur the higher tuition costs to reach the maximum credit. Those who have paid qualifying fees of €2,000 or less in 2011 are no longer entitled to a tax credit.

rent credit

The rent credit has been reduced by 20pc to €320 for a single person in the year 2011 and the tax credit is set to be phased out by 2017. But taxpayers still have an opportunity to claim the credit back to 2008 and should take advantage of this.

bin charges

Tax relief on bin charges was abolished for the year 2011 and subsequent years. However, taxpayers may still claim relief for tax years as far back as 2008.

Obviously, not everyone is entitled to the same tax credits and relief so it is up to the individual themselves to ensure they know their entitlements, the tax expert stressed.

For example, people should ensure they have claimed the home carer credit if they are entitled to it.

overpaying tax

Overpaying tax is also an area which results in many people receiving welcome cash refunds from the Revenue.

Individuals should look back on their income levy and USC (universal social charge) payments to ensure that they have not overpaid these in previous years and should claim a refund before it is too late.

PRSI and the health levy may also have been overpaid in previous years. Again, individuals should claim these refunds before it is too late, Ms Keily advised.

It was previously suggested that the Government might reduce the rate of relief on pension contributions. However, this was not imposed -- leaving pension payments as a good option to reduce an individual's tax bill.

There are very few ways to beat the January blues but a cheque from the Revenue could certainly help. "We believe it is so important that taxpayers are aware of all the tax credits and reliefs that they are entitled to and submit a claim to the Revenue Commissioners each year in order to maximise the potential refunds that they are legally entitled to," Ms Keily said.

It is the responsibility of each taxpayer to keep on top of their tax affairs and claim the tax credits and reliefs available to them, the tax expert added.

Irish Independent Supplement