Take an axe to tax

There are a number of tax reliefs you can claim and the savings you make by availing of them are not to be scoffed at

WITH ANOTHER austerity budget on the way, one which might herald the advent of property tax and water charges, taking advantage of any tax reliefs currently available is critically important.

For the self-employed and those needing to file tax returns annually, October is a time of grappling with paperwork and hoping the bill is lower than you expected.

But PAYE workers should also take the opportunity to consider how they might reduce their overall tax burden. Here are some tips for both self-employed and PAYE workers alike.

DON’T MISS THE DEADLINE

For those required to file annual tax returns, missing the deadline is the most basic of errors, but one that many regularly make, even though the costs of doing so can be significant.

If you miss the first deadline but get your return in by the end of the year, you will be charged €12,695, or 5 per cent of the tax due, whichever is the lesser. If it’s later then that however, the penalty rises to the lesser of €63,485 or 10 per cent of your tax bill. So make sure you file on time. This year, the deadline for those wishing to pay online is November 15th, or October 31st if you do so by post.

But remember that it can take some time to file and pay online via the Revenue Commissioner’s system ROS, so even if you’re not ready to file yet, check that everything is in place to do so. Should you forget a password, or should your digital certificate be out of date, you might need to communicate with the Revenue by post which can take time.

DON’T PAY YOUR TAX BILL WITH A CREDIT CARD

It is now possible to settle your tax bill by paying with a credit card via ROS. However, doing so incurs a charge of 1.49 per cent, which can see the total size of your tax bill increase.

Apart from the levy, it’s also not the most economical way of settling your bill if you’re short of funds. For example, if you pay your €10,000 bill with a card that charges interest at 20 per cent and you don’t have the funds to cover it, you could be looking at a total bill of more than €50,000 if you manage to make just the minimum repayment on your card each month.

A better option would be to discuss your situation with the Revenue or your accountant and try and come to a more favourable agreement.

DO GET YOUR BINS OUT FOR THE LAST TIME

You can claim back up to €80 a year by claiming tax relief on the cost of your bin or service charges. Relief is given at the standard rate of tax, 20 per cent, which means that a typical household can expect to get €40 back, given average charges of €200 a year.

The relief will be abolished from this December, so it’s worth availing of while you still can. Remember, you must have paid your charges on time to qualify for this relief.

To claim, account for it in your tax return or use the Revenue’s PAYE Anytime service.