Your outstanding tax bill could be reduced or even turned into a refund by claiming additional tax reliefs.
Thousands of workers in Ireland who received Covid-19 wage subsidies last year will be contacted by Revenue today (15 January) about their preliminary tax position.
Revenue has confirmed that more than 400,000 people who received the Pandemic Unemployment Payment (PUP) or a Temporary Wage Subsidy Scheme (TWSS) payment in 2020 will face a tax bill, as these payments were not taxed in real time by Revenue through employers throughout the year.
To help those facing an unexpected bill, the Association of Chartered Certified Accountants (ACCA) has outlined six PAYE tax credits available to employees in Ireland. They include reliefs that can typically go unclaimed by households across the country each year.
ACCA said that the figure owed to Revenue could be reduced or even turned into a refund by claiming additional tax credits. The credits can be claimed through the MyAccount section on Revenue’s website.
1. E-working tax reliefs
Revenue update its guidance on e-working tax reliefs last year for those forced to work remotely during the pandemic, outlining that an employer may pay an employee up to €3.20 per day to cover the additional costs of working from home.
If your employer didn’t opt to reimburse you for these costs, you could claim 10pc of your electricity and heat costs and 30pc of your broadband costs, based on the number of days you have worked from home. The ACCA said a person working from home since March could claim around €200 for home office expenses.
2. Home carer
Those who have been caring for children, for a parent or relative over the age of 65, or for a person permanently incapacitated due to mental or physical disability could be eligible for a home carer tax credit of up to €1,600.
However, income limits apply here. If you earn less than €7,200, then you can claim the full tax credit available.
Those who earn more than €7,200 will receive a reduced tax credit and those who earned more than €10,400 during 2020 cannot claim the tax credit.
3. Health expenses
Tax reliefs are also available for medical and pharmacy expenses not covered by health insurance or the HSE. For every €5 a person spends, €1 can be claimed.
Types of expenses you can claim for include consultant fees, dentist fees, maternity care, nursing home fees, psychologist fees and more.
4. Stay and Spend Scheme
The Stay and Spend Scheme was introduced last year to encourage people living in Ireland to holiday within the country and support the local economy. A tax credit can be claimed for hotel accommodation and dining out expenses incurred between 1 October 2020 and 30 April 2021.
The maximum tax credit available under the scheme is €125 per person or €250 for a couple. The minimum spend is €25 per transaction with businesses that have registered for the scheme.
5. Flat-rate expense allowances
Employees in certain industries will get an automatic flat-rate expense allowance, which covers necessary work equipment such as tools and stationery. This may range between €40 and more than €600.
The amount of the deduction is agreed between Revenue and representatives of groups of employees, usually trade union officials.
6. Pension contributions
People who pay into a pension fund may be eligible for tax relief for their pension contributions, including additional voluntary contributions. This is a once-off credit that could reduce your tax bill by up to €40 for every €100 saved to the pension, according to the ACCA.
This relief applies to occupational pension funds, personal retirement savings accounts (PRSAs), retirement annuity contracts and qualifying overseas plans.