Refunds denied to two taxpayers overcharged by Revenue

No flexibility possible on four-year repayment rule, Tax Appeals Commission rules

The Office of the Revenue Commissioners: conceded that taxpayers had overpaid  in both of the appealed cases

The Office of the Revenue Commissioners: conceded that taxpayers had overpaid in both of the appealed cases


The Tax Appeals Commission has ruled that two taxpayers cannot get refunds of tax overpayments dating back more than four years, even though the Revenue Commissioners have conceded that in both cases the taxpayers involved paid too much. In one case, too much tax was wrongly deducted from a social welfare pension for a period of 15 years, but repayments were only made in respect of four of these years.

In two separate cases, the commission found that it did not have the power to get Revenue to repay overcharged tax, due to a provision in tax law that only allows claimants to seek repayments going back four years.

The determinations by the commission, published recently, are notable, as in both cases the facts of what happened were broadly accepted by both the taxpayer and Revenue. However, the commissioner hearing the cases found that the office did not have discretion in relation to the four-year limitation period.

The Tax Appeals Commission is an independent statutory body which started to accept appeals just over a year ago in cases where taxpayers wanted to challenge a Revenue decision.

First case

In the first case, an 85-year-old individual appealed in relation to income tax wrongly deducted from their social welfare old-age pension.

“Through no fault of the appellant, an error occurred whereby the contributory State pension of the appellant’s spouse was incorrectly treated for tax purposes as income of the appellant and was taxed accordingly,” the determination stated.

As a result, the appellant’s spouse did not receive the benefit of their pay-as-you-earn (PAYE) credit. The failure to apply the PAYE credit resulted in the pension being taxed at a higher rate, and this tax was deducted at source by Revenue.

The taxpayer noticed the error in 2015 and money relating to 2011-2014 was repaid. However, Revenue “admitted that the error had gone unnoticed for in excess of 15 years”, continuing from 1999/2000 until it was discovered in 2015.

The taxpayer appealed on the grounds that an error made by Revenue “resulted in a significant loss of income” and that “it was unconscionable to apply the four-year rule taking into account the facts and circumstances of this case”.

The appeals commissioner said that the wording of the relevant 2007 tax legislation stated that a claim for repayment “ shall not be allowed” unless it is made within four years. The use of the word “shall” “indicates an absence of discretion in the application of this provision, the commissioner’s determination said. This is despite the fact that the appellant did “nothing at all” to trigger the overpayment of tax to which they have been subjected.

Second case

In the second case, the appellant’s employer filed P35 tax forms – an annual summary of taxes and charges paid from the employee’s income to Revenue – in respect of the taxpayer for 2009 and 2010. These showed that the appellant was due a repayment of tax. However, the appellant was unaware of the P35 returns and the repayments that were due.The appellant only became aware of the repayment due in 2015, but was told by Revenue that the claim was “out of time”.

The appellant appealed to the commission on the grounds of being unaware of the repayment due until informed by the local tax office in 2015, arguing that it was unreasonable for Revenue to apply the four-year rule in these circircumstances. However, the commission used the same reasoning in relation to the wording of the legislation to disallow the appeal.

The taxpayers involved are not identified, as all appellants have the right to have their personal details withheld in published determinations. The amounts of money involved are also not revealed in the determinations. They have the right to appeal the decisions to the High Court.