Are you claiming all your tax back?

Tips on maximising tax credits to save yourself money...

Are you claiming all your tax back?

A payslip displaying tax deductions alongside 50 euro notes | Image: Brian Lawless / PA Archive/Press Association Images

Roughly €800 million in tax credits goes unclaimed in Ireland every year and it's very possible that some of that cash could be coming your way with a little bit of knowledge, attention and effort.

If your P60 for last year has arrived but you are unsure whether you're owed money, two tax experts were on hand on Newstalk this morning to fill you in.

Barry Flanagan, senior tax manager at Taxback.com, told Newstalk that the first thing you should do is make sure you have the full amount of tax credits and tax bands that you are entitled to included on the P60 itself.

"Every employee who's earning more than €8,250 per year should have two tax credits included on their P60," Flanagan said. "That is the personal tax credit of €1,650 and also a PAYE tax credit in the same amount.

"So when you look at your P60, you should look up the top, and if this is your only employment then you should see tax credits of €3,300. If you don't see that, then you need to know the reason why... It can be the case where they may not have those credits if they have two employments. You are then reliant on both of your employers to ensure that they're correct and mistakes can happen."

Home Carer Tax Credit

One of the most common unclaimed credits, this is for jointly-assessed couples who have children and where only one spouse is working.

In 2017, it is worth €1,100. This is up from €1,000 last year and €810 for the previous two years, which you can still claim due to the fact all tax credits can be availed of for up to four years.

"I think a lot of people don't understand the home care tax credit," said Flanagan, "because I think when it was named by Revenue, perhaps they were erring on the side of caution and being a little too politically correct with the name.

"So people think 'home carer' applies to somebody who's caring for an elderly or disabled relative. It actually applies to people who have children."

Medical expenses

Some 400,000 people claimed for medical expenses in 2015, the last tax year for which figures are available.

"It is quite widely known but at the same time we believe that there's probably the same amounts of people who are not claiming this," said Flanagan. "Again, you can go back up to four years. And there are very few families in the country who have been fortunate enough not to have had any expenditure on medical expenses over the last four years."

"It's important to realise that it is only the un-reimbursed portion that you can reclaim. So if you are receiving any amounts back from an insurance company, you can't claim back on that. But there definitely amounts that are available there if you have incurred the expense on behalf of you or anybody else."

It doesn't matter whether the treatment involved was for you – as long as you paid for it, you can claim.

Andrew McCann, author of Know Your Rights, looked at these kind of expenses in a little more detail later on The Pat Kenny Show.

"The first thing to say is that there's no minimum spend," he said. "Everything you spend money on, you can get tax back."

"So if your doctor's fee is €50, that's a tenner back in your pocket for every time you go.

"If you go to a consultant and maybe pay €100, that's €20. If you go to A&E, that's €20 back. If you pay medications of €144 [per month] – which is the maximum threshold – you'll get about €25 back a month."

 

McCann stressed that you should keep a record of your expenses just in case the tax man comes knocking

""What's very important is, there is a trust element from Revenue. So they don't ask you to send all the receipts in but they ask you to keep the receipts in case of audit. And I hear many stories of people claiming things that they haven't actually spent the money on, so be very careful of that."

Dentistry

"You cannot claim for routine work – cleaning and fillings," McCann explained. "You cannot claim for extractions or cosmetic work. But you can claim for root canal treatment, for orthodontic work and for braces... And that would cover you in Ireland or anywhere across the EU for dental work, once it's certified for that country."

Nursing home fees

McCann also revealed a "little loophole still the law" that allows you to claim at the higher rate of tax for nursing home fees:

"So you can claim up to 40% if you're paying for your parent in a nursing home, or paying it between a couple of children."

Advice for Couples

 In cases where one spouse is earning sustantially more than another, McCann advises contacting Revenue:

"What you want to do is have the person who is earning the most to pay as little tax as possible at the higher rate... You let Revenue know that situation, and they will balance it more in favour of the high-earning person, so collectively you pay less."

 Flat rate (employment) expenses

Turning to deductions you can make from your taxable income bassed simply on your profession, Barry Flanagan said:

"So shop workers are entitled to a deduction from their taxable income of €121 and that's not very well known at all."

This was originally brought in to account for clothing people are required to have for work.

"That's the intention behind it but you don't actually have to provide any receipts, so it's an automatic deduction that's given. More heavily-unionised profession tend to know about flat-rate expenses."

So nurses who have to launder and supply their own uniform will generally know they can get €733 back for that.

"But," Flanagan noted, "there's a lot of other professions who don't." This includes journalists, archaelogists and teachers.

Education

"If you're spending over €3,000 as a full-time student," says McCann, "you can get 20% of the cost back, or your parents can if they're paying for it."

The third-level fees tax credit applies to many parents who have more than one child in college simultaneously.

In all cases, the internet is your friend.

McCann directs taxpayers to Revenue's website, saying:

"It's really user-friendly. You got to revenue.ie and set up 'my account' on the system... You can also do your tax refunds online."