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Column: 5 ways to get money back from the taxman

Millions of euro in tax refunds goes unclaimed by the Irish public every year, writes Barry Flanagan.

Barry Flanagan Tax Director, Taxback.com

WORKING IN THIS industry, I am acutely aware of the fact that millions of euro in tax refunds goes unclaimed by the Irish public every year.

For most of us, quite aside from any “luxury” spending on new clothes or holidays, the price we pay for day-to-day living expenses is not cheap – this is especially true when it comes to larger expenses such as medical care, providing care for a loved one, paying college fees for children or personal further education, and even nursing home fees for an elderly parent or relative.

I doubt that there’s anyone in the country who wouldn’t welcome a financial helping hand with these costs.

Taxapathy

Over the years we’ve done a lot of research at Taxback.com in order to get to the bottom of an apparent “taxapathy” amongst Irish taxpayers. Our various surveys, customer analysis reports, focus groups etc. have all shed some light on what’s holding people back.

While the reasons behind individual behaviour differ greatly, if we could pinpoint one reason behind the inaction of the Irish taxpayer when it comes to getting what’s owed, I believe that it’s lack of awareness and/or knowledge. Quite simply, people either don’t know about the tax reliefs they are eligible for, or think the process of applying for a refund is “way too much hassle”.

Without knowledge, others are afraid to claim for fear that they will end up owing the Revenue. Therefore, knowledge is critical when dealing with tax. The average refund our Irish PAYE clients get is somewhere in and around €995 so it’s not small money. But again, I think people just don’t realise this.

Age definitely impacts financial behaviours and we have found that those in the 20 – 40 year age bracket are better at coming forth to claim refunds and entitlements. But in fact, it’s often older workers who are usually entitled to more!

5 ways to claim money from the taxman

Medical expenses

One of the most accessible and common expenses that can be claimed. Relief at 20% is available and can be claimed on most unreimbursed expenses and on qualifying, non-routine dental expenses.

Home Carer Tax Credit

Many people wrongly believe that this credit is for those caring for other people’s children, the elderly or disabled people. In fact, the credit of €1,200 (2018) can be claimed by any married couple, where one spouse is a housewife/househusband and cares for one/more dependent persons, which includes their own children under 18.

Tuition fees

If you are paying tuition fees for a full or part-time third level course, be it for yourself or for your child, then you may well be entitled to tax relief on the cost. Third level fee payers can claim tax relief on tuition fees (including the student contribution) that are paid for eligible education courses. The relief is available to whoever is paying the cost of the fees.

And if you are paying for more than one child to go to college, the good news is that there is no limit on the number of individuals for whom you can claim. In fact, most claims for this type of relief come from parents with more than one child in college at the same time.

Tax relief is granted at 20% – the standard rate of tax. However, the relief is only applicable on any amount above €3,000 and there is a limit of fees, at €7,000 per course, on which you can claim relief.

Flat Rate Expenses

Most employees are unaware they can be reimbursed for any expenses incurred wholly, exclusively and necessarily in the performance of their duties. Flat rate expense allowances are set for various classes of employee, eg shop workers are granted €121 per year and bar trade employees get €97 per annum.

Nurses who supply and launder their own uniforms can claim a deduction of €733. Deductions are available to doctors, engineers, plumbers, journalists, teachers and hospitality sector workers, among other professions.

Nursing Homes Costs

Despite a gradual erosion of reliefs, nursing home fees have remained as one of the few items where relief is still available at the higher rate of 40%. This makes it even more surprising that not everyone is claiming this relief.

Each year, 400,000 taxpayers claim back €150 million from Revenue in respect of medical expenses and nursing home fees alone, but we have estimated that as much as €150 million more could be left unclaimed in credits for unreimbursed medical expenses each year.

In the hope of encouraging more people to getting what’s owed, last year we launched an online resource to provide Ireland’s PAYE tax payers with an easy-to-access, easy-to-use tax guide that illustrates how the tax system works, what reliefs are available and how to can go about getting them.

Barry Flanagan is a Tax Manager at Taxback.com.

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About the author:

Barry Flanagan  / Tax Director, Taxback.com

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