Revenue's click and claim service

PAYE workers can now reduce their tax liabilities online, by phone or by text, writes Laura Slattery

Just as winter sets in and electricity bills go up and interest rates rise, the Revenue Commissioners have thoughtfully started posting helpful reminder notices to people who haven't paid their full liabilities for 2005.

The "pay and file" deadline for these taxpayers is October 31st, with an extension until November 16th for people who use the Revenue Online Service (Ros).

PAYE workers, however, who often despair at the amount of tax they see deducted from their gross pay every month, typically do not make a tax return or keep in regular contact with a tax adviser. By not bothering to send the Revenue any claim forms at all, they often miss out on their entitlements.

The good news for people is that it is no longer necessary to queue in your local tax office and/ or fill out long, confusing forms to claim some of the most common reliefs and entitlements.

PAYE workers can now reduce their tax liabilities online, by telephone or even by texting the Revenue as part of its new range of self-service options.

This is the first year of operation for the PAYE online service and over the summer, some 2.2 million PAYE workers were sent six-digit PIN numbers allowing secure access to the service at www.revenue.ie.

By entering their PIN and personal public service (PPS) number (formerly RSI number), taxpayers can change their address, track their correspondence with the Revenue and - most importantly - claim tax relief on expenses such as rent, bin charges, trade union subscriptions, employment-related expenses and the tax relief on health insurance (usually given "at source" by the health insurance company). They can also claim the age tax credit for people aged 65 and over, which works out at €250 for a single person and €500 for a married couple, and the dependent relative tax credit, which is worth €80. The rent, bin charges, trade union, age and dependent relative credits can also be claimed by texting "info credit" to 51829.

Mobile users can text "info address" to this number to change their address; "info form" or "info leaflet" if they want to order PAYE forms and leaflets; and "info post" to check the progress of any written contact with the Revenue, which can also be contacted at a range of 1890 lo-call numbers.

"We are conscious that some people don't have internet access and we get quite a lot of queries via the telephone," says Declan Rigney, responsible for customer service policy at the Revenue. "But clearly the online service has more flexibility built into it."

To access a wider range of services, PAYE workers must register with the Government's "Reachservices" system. Like the registration process for the Ros system used by self-assessed taxpayers, signing up to Reachservices takes time and involves a number of steps. Users must "match" their personal details with their "public service identity". They are then sent a "Reachservices activation code" by post.

Once set up using the activation code, the full PAYE online service should help most taxpayers get their hands on a tasty tax refund without having to "make human contact" with the Revenue, as it puts it.

The service allows people to view their tax record, claim additional tax credits online, request a review of the amount of tax they have paid for a particular year (known as a balancing statement) and share tax credits between themselves and their spouse.

They can also claim one of the most common - and commonly unclaimed - tax reliefs available: relief on medical expenses. This is one of the few reliefs where taxpayers can claim at their higher rate of tax, making it particularly valuable for 42 per cent taxpayers.

Medical expenses incurred by the claimant or their family that have not been reimbursed under any other health insurance or compensation scheme can be claimed under the relief.

Most people are members of the old-style health insurance plans, like VHI's Plan B, that don't cover so-called everyday medical expenses like trips to the GP. For higher-rate taxpayers, 42 per cent of this cost can be claimed back from the Revenue,

One drawback is that the first €125 of expenses (or €250 if the claim is on behalf of more than one person) must be paid.

Self-assessed taxpayers can make claims for medical expenses on their Form 11 tax return. PAYE workers who don't want to go through the online registration process can claim by filling out form MED 1, available from the Revenue.

Sight testing and routine dental treatment do not qualify; however some dental costs are eligible and can be claimed using form MED 2. This must be completed and signed by the dentist.

Medical expenses relief is one of four reliefs that attract high numbers of claims from PAYE customers whenever it embarks on a tax credits publicity campaign, according the Revenue.

The other three that receive attention are the reliefs on bin and other service charges, rent and the age tax credit. Bin taxes have proved to be one of the more controversial and resented indirect taxes in recent years, but there is a way for homeowners to reduce their household costs.

The relief on service charges is available at the standard tax rate of 20 per cent on charges paid to local authorities for bin collection, water supply and domestic sewage disposal, and to private contractors in the case of bin collection and group water schemes for water supply.

The relief is restricted to a maximum of €195 per annum under the bin tag system and homeowners should keep the stubs of their tags to claim the relief for the previous calendar year.

Although it has not yet issued statistics on the use of its self-service options, the Revenue says it has received a substantial number of "contacts" from PAYE workers since it sent out the PINs.

The busiest period for claims from PAYE workers tends to be the early part of the year, when they are sent their tax credit certificates, according to Rigney.

This is when people traditionally check that they are receiving their full entitlements - or at least the ones they know about. In many cases, people often don't know that particular tax credits even exist, with the result that they unwittingly give the Exchequer an unasked-for bonus every year.