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Revenue not ruling out back tax on pensioners

Declan Rigby from the Office of the Revenue Commissioners said that there will not be an across-the-board amnesty on pensioners who owe tax.

File photo.
File photo.
Image: Laura Hutton/Photocall Ireland

THE OFFICE OF the Revenue Commissioners has refused to rule out the possibility of back-taxing pensioners who have understated the amount of income they were receiving.

Speaking to Morning Ireland, Declan Rigby from Revenue said there would not be an amnesty on the tax that is owed by some who under-declared their incomes.

However, he said that more analysis would need to be carried out on the data the Revenue received from the Department of Social Protection, which led to the liabilities being identified.

“We have to see what the implications of the differing groups are after doing more analysis…and we need time to do that,” he said.

According to Rigby, the Revenue is concentrating on 2012 and he indicated that any back-tax would be targeted on people with a higher income.

Yesterday, 115,000 pensioners who receive a State pension, as well as a second source of income, were informed that they may have to pay more income tax this year.

“The variety involved in this is immense,” Rigby told RTÉ. “It may be that somebody has a very modest income and could see a €5 to €8 a week increase in tax.”

However, those on a higher income tier may have to pay up to €4,400 per year or €8,800 if married.

Ribgy explained that the onus was on pensioners to tell Revenue about their State pension if they were also receiving a salary, occupational pension or State pension.

Those over 65 earning more than €18,000 (or €36,000 if married) are liable to pay tax.

“It is a tricky area to interpret and understand,” conceded Rigby.

Anyone whose State pension is their sole income does not have to pay income tax and about 20,000 will end up paying less tax as a result of the data exchange between the department and Revenue.

Age Action has called for more information to be disseminated so State pensioners can ensure they are tax compliant.

Eamon Timmins, a spokesperson from the group, said there needs to be a clear, public information campaign from the Revenue Commissioners and the Department of Social Protection.

“The letters from the Revenue Commissioners stating that pensioners owe them monies as a result of underpayments going back a number of years, have caused anger among those who received them,” Timmons added in a statement.

The bottom line is that law-abiding citizens are now left with tax bills at the start of a year when there have never been as many demands on their pensions, and with new taxes and charges to pay. It will cause further hardship for many older people.”

Read more: 115,000 pensioners told: You’ll have to pay more tax>

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