Millions of euro slipping through taxpayers' fingers every single year
Taxpayers let millions of euro slip away every year by not claiming back what is rightfully theirs. Millions of euro in unclaimed refunds go straight into the arms of the tax authorities.
The upcoming deadline for filing a tax return for the self-employed and PAYE workers who have untaxed income means this is a good time to sort out what you are owed.
The average household is estimated to be missing out on €880 a year in tax refunds.
Large numbers of people are failing to claim tax refunds owed to them and avail of tax breaks, according to chartered tax consultant with Taxback.com Barry Flanagan.
"This money would be a welcome windfall for thousands of homeowners throughout the country and could be circulating back into the economy - which would benefit everyone, he said."
Gone are the days of higher-rate tax relief for medical expenses or relief on bin charges and we won't see a tax credit for water charges paid until 2016. But there is still a long list of tax reliefs available to people.
The reason people don't get what is owed to them from the taxman every year is either due to a lack of awareness or apathy, Mr Flanagan said.
A lot of people still find applying for a tax refund confusing or complicated.
Revenue has made attempts to educate taxpayers as to their entitlements regarding tax credits and reliefs - but tax is a difficult subject.
Not everyone is entitled to the same tax credits and reliefs, so it is up to the individual to ensure they know their entitlements. For example, people should ensure that they have claimed the home-carer credit if they are entitled to it.
What you need to do
To assess an individual's position, you just need your PPS number and some personal details, according to Cathal Maxwell of PayLessTax.ie.
You can log onto the Revenue website and download forms which you will need to submit with the appropriate documentation, such as receipts etc.
The other option is to engage a professional, as they apply for a refund on your behalf. Taxback.com's average PAYE worker tax refund is €880, Mr Flanagan said.
Pay and file deadline
Some 500,000 people are due to file a self-assessment tax return, according to Cathal Maxwell of PayLessTax.ie.
Those who are making a paper-based return have until next Saturday, October 31, to file a return and pay their tax.
But those who file online, by downloading a digital signature from Revenue, have until Thursday, November 12, to file and pay tax through Revenue On Line (ROS), Mr Maxwell said.
Revenue said that under pay and file you have to file an income tax return (Form 11) for the 2014 tax year, including a self-assessment of tax due. You also have to pay the balance of any tax due for 2014 and pay preliminary tax for the current tax year - 2015.
Tax returns are due by October 13 for people who file their return of income in paper format. The vast majority of people now file their return electronically and the due date for those taxpayers returning the 2014 income and capital gains tax return is November 12.
To be entitled to avail of this extension, the payment of taxes must also be made electronically, according to Cathal Maxwell of PayLessTax.ie.
Revenue has provided the following tips based on feedback received from filers:
- Make sure the 'Personal Details' section is correct eg civil status (assessment basis) and date of birth (important for tax credits and calculating pension relief at correct rate).
- If using the ROS pre-populated online form, taxpayers have to enter the actual details into the ROS pre-populated panels otherwise that information will not form part of the return and will not feed into the calculations.
- Complete the ROS panels as relevant to circumstances, e.g. the ROS panel should be completed if there is self-employed income. Fields marked as mandatory must be completed. If any mandatory fields don't apply, then insert 'zero' in order to progress.
- 'Irish Rental Income' panel - only 75pc of interest incurred on rental properties is allowable. This is the amount that should be entered.
- If a taxpayer with PAYE income has already received a PAYE refund for 2014, those details should be included in the relevant field.
- 'Personal Tax Credits' panel - taxpayers are urged to ensure that they claim all the PAYE or other credits due. In the past, some customers have forgotten to tick the 'PAYE tax credit' option, resulting in an incorrect calculation of their liability.
- Anyone claiming relief on pension contributions should enter details of the pension contributions made in the Charges and Deductions panel (or the PAYE/BIK/Pensions panel if an AVC) and also complete the 'Pension Relief' calculator, which will compute the maximum amount of relief allowable.
- Be as accurate as possible when navigating returns to avoid the 'warning' or 'error' messages. The entry identified by the 'Warning' message may be correct or may require amendment. If the entry is incorrect, you should make the necessary amendment. If the entry is correct, you can continue to save or sign and submit the return.
- An 'error' message will prevent a taxpayer from saving their return until an input is corrected. The field with the error will be highlighted. In some instances, it may be necessary to go back to an earlier screen to update an input.