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Unclaimed tax refunds: How to get some of your tax back

Irish taxpayers are losing out by an average of almost €300 each by not filing a tax return each year and claiming credits they are due

According to the latest figures, filling out a tax return as a PAYE worker can lead to a refund from Revenue. And you can file a return for the previous four years

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Fiona Reddan
Tue Feb 6 2024 - 05:00

Irish taxpayers are leaving some €683 million on the table, or almost €300 each, by not filing income tax returns, and claiming all the credits they are due, new figures show.

With some 2.5 million PAYE workers now eligible to access their preliminary end-of-year statements for 2023, taxpayers are being called upon to access the Revenue’s MyAccount online service to complete their tax returns.

Doing so, after all, can lead to some financial gain.

“Given the huge amount of unclaimed tax refunds, now is the time for employees to take charge and ensure they are maximising their entitlements to tax credits and other reliefs,” says Olive O’Donoghue, a tax partner at KPMG.

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Of course, some people may find they end up owing tax; and this is the dilemma that can cause people to procrastinate.

When and what can I claim?

If you haven’t claimed your tax credits back in a while, doing so now may bring even greater rewards, as you have four years from the end of a tax year to claim any relevant refunds. This means that as it’s now 2024, you can claim credits for every year from 2020 – anything before that, however, can no longer be refunded.

“The four-year time limit really traps people,” says O’Donoghue, adding that about 15 per cent of all tax appeal cases in 2023 related to this rule. While she agrees that it should be extended in some way – “even if you had a window to allow people to go back further for a limited period of time” – she thinks a move on this is unlikely.

“I don’t see it changing,” she says.

So what can you claim?

Health expenses

As new figures from Revenue show, this has been the most popular expense to claim to date, with almost 90,000 claims made already. In the last full year for which figures are available – 2021 – almost 600,000 people claimed it, with an average refund of €364.

As O’Donoghue notes, you can claim back money on a range of medical expenses, including GP visits and prescriptions, orthodontic and laser eye treatment, nursing home fees, fertility treatment, and certain food products for coeliacs and/or diabetics.

Rent credit

Only about 250,000 of the 400,000 or so people who are deemed eligible for the credit claimed it in 2022. Photograph: iStock

It remains a puzzle as to why so many tenants have yet to claim this credit. Increased in last year’s budget to €750 per individual, or €1,500 per couple for 2024, the credit is due to run until 2025.

However, latest figures show that while a substantial number of taxpayers claimed the credit in 2022 – at about 250,000 – this is still short of the 400,000 or so people who are deemed eligible for the credit.

Latest figures show that almost 70,000 people have claimed the credit so far this year.

As pointed out above, if you are eligible and have yet to claim it, you could stand to gain a significant sum, of about €1,750 for 2022, 2023 and 2024, thanks to the four-year rule.

Home carer credit

One credit that has jumped in value in recent years is the home carer relief. This is aimed at reducing the tax burden on couples where one takes some time out of the workforce to care for children or an elderly relative.

From just €810 back in 2015, the credit is now worth €1,800 a year, and you can claim it in full, provided the stay-at-home parent doesn’t earn more than €7,200 a year. Earnings of up to €10,800 will be eligible for relief at a reduced rate (for example the credit falls to €300 if you earn €10,200 a year).

Latest figures show that only about 75,000 taxpayers benefited from this relief in 2021, even though it is estimated that far more people should be entitled to it. The average claim was for €1,409.

Work from home relief

Again, figures show that not enough people are claiming this relief – in 2021, the Government estimated that some 400,000 people could benefit from the credit. However, latest Revenue figures show that just 20 per cent of those eligible have claimed the relief thus far for 2022.

That may be explained by the relatively low sums involved, with the average claim about €60.

[ Remote work tax credit: too much effort for just €61 back? ]

Flat rate expenses

Flat-rate expenses apply to a wide range of professions, including nursing. Photograph: Frank Miller

Did you know that if you’re an engineer, electrician, nurse or teacher, you can claim back an annual expense allowance to cover essentials such as uniforms and tools of your trade that are not normally covered by your employer?

Flat-rate expenses apply to a wide range of professions, and as part of a review, which first commenced some years ago, these rates have now been changed for 2023. For example, cardiac technicians can now claim a credit of €310 a year, up from €107 for a male technician, and €212 for a female technician. For a higher rate taxpayer, a credit of €310 works out as a saving of €124 a year in tax, or €62 for a standard rate taxpayer.

While Revenue has not yet published its changes for 2023, these are expected to be published shortly, but in any case, it shouldn’t impact on your ability to claim these expenses now.

Mortgage interest relief

Announced in last October’s budget, this new relief is expected to benefit about 160,000 homeowners, at amounts of up to €1,250.

To be eligible, you need to have an outstanding mortgage of between €80,000-€500,000 at the end of 2022, and you must also have paid more interest in 2023, than you did in 2022.

This credit should be available to claim in the coming weeks. Taxpayers who have already filed a PAYE tax return can submit an amended return to claim this credit.

Other credits include tuition fees, pension relief, and single person child carer credit.

[ Are you a homeowner? Here’s how you may be able to get up to €1,250 back this January ]

How can I claim?

To claim your reliefs, and find out if you paid too much – or too little – tax last year, if you’re a PAYE worker you need to submit an income tax return via Revenue’s myAccount service.

This involves requesting a statement of liability, which shows your tax position for the year. You can then amend this by filing your tax return, and declaring any additional income, as well as claiming the aforementioned tax credits.

There is a guide on the Revenue website.

I’m getting a refund!

If you do file a return, there is a good chance that you will get some money back. Overall, some 619,300 taxpayers paid too much last year, at an average of about €775 each. Most of these – at about 400,000 – will get a refund of €500 or less, while some 161,200 will get an average of just €26 back.

However, there is a cohort who will get enough to fund a nice holiday this summer. The figures show that almost 13,000 taxpayers are due a refund in excess of €5,000 for last year, with an average repayment of €6,648.

Your refund will be transferred directly to your bank account within three to five working days.

So it could be worth the risk of filing a return.

What if I actually owe tax?

This may be what stops many from claiming their credits – what if they file a return, only to find out they end up owing tax?

“Some people feel, ‘I won’t put my head above the parapet’,” agrees O’Donoghue.

And it can happen; of those who already filed for 2023 for example, about one in six owe an average of €97 each, while overall, 12 per cent of taxpayers underpaid in 2023, at an average of €565.

As with those who overpaid, the majority of people who file will find that if they left Revenue short last year, it won’t be for too much. About 125,000 taxpayers for example, will find out that they owe less than €100.

However, there are those who may get a nasty surprise; according to Revenue figures, some 4,000 taxpayers owe €5,000 or more, with an average payment of €6,776.

If you do end up owing tax, it can be collected by Revenue through a reduction in your tax credits over up to four years. So, if you owe €100 for example, you will pay an extra €8 or so a month in tax if you opt for repayment over one year. Alternatively, you can opt to pay it up front. If you owe more than €6,000, a notice will issue setting out the amount owed.

What the Revenue data tells us

– More and more taxpayers are filing returns. Latest figures show that more than 472,000 PAYE income tax returns have been processed for 2023. This compares with less than 50,000 for 2018.

– Almost 60 per cent of taxpayer units (may include a single person or couple) who filed a return for 2023 received a refund, of €738 each, on average.

– A quarter were “balanced”, and thus no refund – or bill – was issued.

– Some 16 per cent of taxpayers owed money to Revenue, with an average bill of €97.

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