Paying back Revenue €4,000 that we shouldn't have?!

calgary bound

Hello,

Looking for some advice as my Husband and I are shock after finding out that he has been paying back Revenue almost €4,000 over the last 4 years through his tax credits due to an error on the behalf of his family farm accountants. Really need some help from you knowledgeable people please - I will try keep it brief!

- Husband used to work on the family farm (Saturday's mostly) when he was in college and received a nominal amount at the time every 2/3 months as wages.
- Started his first full time job in December 2012 after college.
- Was earning different amounts each month due to overtime so never really had a set take home pay but salary was low and in the 20% bracket.
- Had been employed by the same company for over 5 years but switched jobs 2 months ago, salaried job €33,000 per annum - no overtime. Noticed when he got paid he was down money compared to online calculators.
- We rang revenue as we thought it was because he was on a week one basis. A nice chap on the phone mentioned that it was good my Husband was nearly at the end of paying back his tax underpayment. We didn't know anything about this and queried it.
- Revenue informed us that his parents family farm accountant made a declaration of income on my Husband's behalf for a second job on the family farm with an income earned of €10,000 in 2013 - when he worked his first full year in employment after college. It was spotted in an audit in 2014 and ever since his tax credits have been reduced by approximately €800 per year.
- Husband didn't work or receive any money from his family farm in 2013 - not a penny. We are absolutely flabbergasted and so annoyed. Would there have been some tax benefit for the family farm accounts to do this? It isn't true as it never happened - what can we do? Some months over the last 4 years we didn't have money for food on the table and my husband worked every hour possible in work to support the family and always seemed to pay a lot of tax - it seems we know why. Does anyone think we can get this money back?

Thank you - sorry for the long post.

Calahonda52

Well the revenue have done the audit so they think the money was paid to your OH.
Can you prove it was not?
If you prove it was not then you will get it back.

You should also write to the family accountant, advising him that unless he sorts it out you will apply to whatever accounting body he is attached to to have him struck off.

The benefit to the farm accounts is that they pay less tax.

seamus

I'd be reasonably confident of getting the money back.

Go back to Revenue and point out that the €10,000 paid to your husband in 2013 was a false declaration and that payment was never made. I don't think he will have to prove that he didn't receive it (that's basically impossible to prove), it will be up to the company to prove he did. So unless they can provide evidence of a bank transfer, or employment records (clock in/clock out charts, etc), they won't be able to prove that he did do work for them.

But Revenue are your first port of call, they'll be able to tell you what to do next. They may treat it as a form of tax evasion on the part of the company.

august12

This is your husband's family farm so we are talking about his parents here, I wouldn't advise going to Revenue or the accountant without first discussing this with his parents and explaining the issue to them and the knock on effect it has had, they maybe in agreement to sort this out and repay to him.

jonnybravo

Might be that the farm accountant allocated the €10k in wages to your husband rather than his parents to reduce the income tax paid by his parents. It might be that by challenging the €10k payment might trigger a bigger liability for your in-laws. Assume your in laws should have some knowledge from the audit but would agree that probably should contact the farm accountant and see what they say.

seamus

I had read it is a "family-owned" farm, i.e. someone else's family. So going down the false declaration route is probably not a good idea

It's relatively common for families to do this kind of thing; I'm sure your husband does/did regular unpaid work on the farm, so the accountant sticks in ten grand to reduce the family's tax liability.

It's not legal unless that ten grand is paid (and the work is actually done), but your husband no doubt doesn't want to land his parents in it.

As above, I'd explain to them the impact that this has had and ask for the €4,000 to be repaid.

calgary bound

Thank you all for your quick replies. Yes it's my husbands mother and father who own the farm. We are so upset at this, we have one baby and another due very soon and we both earn modest incomes so that money really would make some difference to us. My husband is also furious about the principle of it that he has had a tax liability hanging over his head since 2014 that he didn't even know about. On reflection, we should have spotted it as I have looked back at his payslips and his tax free allowance is 2,500 per annum instead of 3,300 but we never spotted it as I suppose we weren't looking.

He has spoken with his parents this morning and they both agree that he wasn't employed and didn't earn any money during that year. Well actually he would have done a few hours here and there after work to help out but never received any payment that year as he was the one handing up money to his mother as he was earning in his first proper job. She seemed fairly shocked by all this and is going to contact the accountants to query it with them. He would have bank statements going back to 2013 at home somewhere and we applied for a mortgage in August 2013 and the bank never queried any additional incomes on the statements fore that year so I am thinking it's some sort of tax avoidance alright. It would be a fairly profitable dairy farm - in laws aren't short of cash at all!

troyzer

calgary bound wrote: »

Hello,

Looking for some advice as my Husband and I are shock after finding out that he has been paying back Revenue almost €4,000 over the last 4 years through his tax credits due to an error on the behalf of his family farm accountants. Really need some help from you knowledgeable people please - I will try keep it brief!

- Husband used to work on the family farm (Saturday's mostly) when he was in college and received a nominal amount at the time every 2/3 months as wages.
- Started his first full time job in December 2012 after college.
- Was earning different amounts each month due to overtime so never really had a set take home pay but salary was low and in the 20% bracket.
- Had been employed by the same company for over 5 years but switched jobs 2 months ago, salaried job €33,000 per annum - no overtime. Noticed when he got paid he was down money compared to online calculators.
- We rang revenue as we thought it was because he was on a week one basis. A nice chap on the phone mentioned that it was good my Husband was nearly at the end of paying back his tax underpayment. We didn't know anything about this and queried it.
- Revenue informed us that his parents family farm accountant made a declaration of income on my Husband's behalf for a second job on the family farm with an income earned of €10,000 in 2013 - when he worked his first full year in employment after college. It was spotted in an audit in 2014 and ever since his tax credits have been reduced by approximately €800 per year.
- Husband didn't work or receive any money from his family farm in 2013 - not a penny. We are absolutely flabbergasted and so annoyed. Would there have been some tax benefit for the family farm accounts to do this? It is a fraudulent claim as it never happened - what can we do? Some months over the last 4 years we didn't have money for food on the table and my husband worked every hour possible in work to support the family and always seemed to pay a lot of tax - it seems we know why. Does anyone think we can get this money back?

Thank you - sorry for the long post.

?

Calahonda52

The accountant needs to be exposed here: this is the sort of stuff that gets buried too often...
As for potential issues for parents with tax man, I trust the 2014 audit sorted all that out.

OP, having said that, go easy on the use of words like evasion and fraud on a public forum

calgary bound

Calahonda52 wrote: »

The accountant needs to be exposed here: this is the sort of stuff that gets buried too often...
As for potential issues for parents with tax man, I trust the 2014 audit sorted all that out.

OP, having said that, go easy on the use of words like evasion and fraud on a public forum

Husband's mother seemed unaware of any audit - would it have been that Revenue audited my husbands income?

Post edited

calgary bound

troyzer wrote: »

?

As stated in my first 2 posts:
-Husband used to work on the family farm (Saturday's mostly) when he was in college and received a nominal amount at the time every 2/3 months as wages.
-Started his first full time job in December 2012 after college.
-Husband didn't work or receive any money from his family farm in 2013 - not a penny.
-He has spoken with his parents this morning and they both agree that he wasn't employed and didn't earn any money during that year. Well actually he would have done a few hours here and there after work to help out but never received any payment that year

troyzer

calgary bound wrote: »

troyzer wrote: »

?

As per the post above, they both agree that he wasn't employed and didn't earn any money during that year. Well actually he would have done a few hours here and there after work to help out but never received any payment that year

Why did you say he nominally received money then?

Stone Deaf 4evr

just before you or your partner have a falling out with your family who own the farm, I assume that he was put through school or college by his parents, was provided for, got a roof over his head, money in his pocket?
I remember when I was 18, (grew up in a farming background) we hadn't a pot to p1ss in, but at the same time, My folks made sure we never missed out on anything, school trips etc.
Its only now that I've my own kids, I can look back and see how hard it must have been, and what they did without. I'll be eternally sorry that I never came to this realisation before my dad died so that I could thank him. Giving his parents the benefit of the doubt, I can only assume they were trying to save money to keep the show on the road, and got bad advice from their accountant.

I can appreciate that you've had a hard couple of years of it, but 4 grand divided over 4 years is only 19 euros a week, hardly the difference between food on the table and not?

calgary bound

troyzer wrote: »

Why did you say he nominally received money then?

If you read my original post, he nominally received money when he was in college - not when he was working full time after college. Unsure of what you are seeking clarification on?

CramCycle

calgary bound wrote: »

If you read my original post, he nominally received money when he was in college - not when he was working full time after college. Unsure of what you are seeking clarification on?

Its because the word means something other than what you are saying? I presume you meant small, nominally means in name only ie a false declaration.

What you meant to say was every few months they threw him a bit of cash for work done but it was a small amount and not even close to a working wage, because he is family.

calgary bound

Yes that's what I meant. Thanks - apologies.

Thanks to those who provided valuable advise. We will get it sorted.

troyzer

calgary bound wrote: »

If you read my original post, he nominally received money when he was in college - not when he was working full time after college. Unsure of what you are seeking clarification on?

You're saying he was paid when working on the farm. And then you later said he was never paid for working on the foam. Whether or not he was in college is irrelevant.

Either he was paid or he wasn't.

CramCycle wrote: »

Its because the word means something other than what you are saying? I presume you meant small, nominally means in name only ie a false declaration.

What you meant to say was every few months they threw him a bit of cash for work done but it was a small amount and not even close to a working wage, because he is family.

Yeah, I'm a bit confused by the wording as well. If it's the latter, how did Revenue ever find out?

Seve OB

Stone Deaf 4evr wrote: »

just before you or your partner have a falling out with your family who own the farm, I assume that he was put through school or college by his parents, was provided for, got a roof over his head, money in his pocket?
I remember when I was 18, (grew up in a farming background) we hadn't a pot to p1ss in, but at the same time, My folks made sure we never missed out on anything, school trips etc.
Its only now that I've my own kids, I can look back and see how hard it must have been, and what they did without. I'll be eternally sorry that I never came to this realisation before my dad died so that I could thank him. Giving his parents the benefit of the doubt, I can only assume they were trying to save money to keep the show on the road, and got bad advice from their accountant.

I can appreciate that you've had a hard couple of years of it, but 4 grand divided over 4 years is only 19 euros a week, hardly the difference between food on the table and not?

what has that got to do with a tax charge?????

oh yea


Nothing!

CramCycle

You should certainly get the money back for the previous four years (2013 - 2017) but act quickly (before years end). If your parents in law did not know about it, it is not a huge amount if they are well off and the mistake is by their accountant, not them. The fact that your husband did work there before, and Revenue won't have to look further back means it should be resolved fairly easily.

They will probably have a tax bill to Revenue but it won't be huge, you will get it all back as a lump sum and have added credits for the remainder of the year.

I had similar before, just went into the tax office and they didn't even investigate it, just took it off the credits and heard nothing else about it. If your near your tax office and have a day to waste, it might be worth doing it in person.

troyzer

CramCycle wrote: »

You should certainly get the money back for the previous four years (2013 - 2017) but act quickly (before years end). If your parents in law did not know about it, it is not a huge amount if they are well off and the mistake is by their accountant, not them. The fact that your husband did work there before, and Revenue won't have to look further back means it should be resolved fairly easily.

They will probably have a tax bill to Revenue but it won't be huge, you will get it all back as a lump sum and have added credits for the remainder of the year.

I had similar before, just went into the tax office and they didn't even investigate it, just took it off the credits and heard nothing else about it. If your near your tax office and have a day to waste, it might be worth doing it in person.

Getting €10k for a day's work isn't a day wasted, it's being a professional soccer player.

Seve OB

troyzer wrote: »

Getting €10k for a day's work isn't a day wasted, it's being a professional soccer player.

at 10k a day, they would be a pretty crap soccer player

august12

The reasoning behind this is as follows, the parents income was reduced by 10,000 for this particular year, this is often done if there is a family member attending college, it brings the parents income within the threshold to qualify for third level grants, I wonder does the OPs husband have a younger sibling in college at that time, the knock on affect this has for other family members whom the payment is made to is often not fully understood, especially someone entering the workforce, the accountant should have known better. I know this because I assessed third level grants and this popped up quite a lot with self employed.

calgary bound

troyzer wrote: »

You're saying he was paid when working on the farm. And then you later said he was never paid for working on the form. Whether or not he was in college is irrelevant.

Either he was paid or he wasn't.



Yeah, I'm a bit confused by the wording as well. If it's the latter, how did Revenue ever find out?

He received a few bob every now and again between the years 2008-2012 while he was a student and didn't have an income from a full-time job. He was a registered employee of the farm during those years.

In December 2012, he started working full-time in another job and no longer received any payment from the family farm. He would have helped out here and there when he was full-time employed in his "real" job but never received a penny. Clear?

Seve OB

august12 wrote: »

The reasoning behind this is as follows, the parents income was reduced by 10,000 for this particular year, this is often done if there is a family member attending college, it brings the parents income within the threshold to qualify for third level grants, I wonder does the OPs husband have a younger sibling in college at that time, the knock on affect this has for other family members whom the payment is made to is often not fully understood, especially someone entering the workforce, the accountant should have known better. I know this because I assessed third level grants and this popped up quite a lot with self employed.

now that is tax evasion

CramCycle

troyzer wrote: »

Yeah, I'm a bit confused by the wording as well. If it's the latter, how did Revenue ever find out?

It is not that Revenue found out, it is that the family accountant put the son down as a PAYE employee. Probably thought grand, it is a small amount, he won't even notice. When the son worked, his credits were probably still attached to the family farm.

Several ways to fix it, but the first thing is to get revenue to move all the credits to your husband, and remove the family farm as an employer.

From here you can go the revenue route, tell them that your husband is not and has not been an employed by them for the past four years and could they adjust his credits and P21 for the previous four years. It may need to be done in person if the family accountant has sent in a P60 for him each year.

The other ways are not legal and I am not posting them but should be fairly obvious in discussion with your in laws accountant

troyzer

calgary bound wrote: »

He received a few bob every now and again between the years 2008-2012 while he was a student and didn't have an income from a full-time job. He was a registered employee of the farm during those years.

In December 2012, he started working full-time in another job and no longer received any payment from the family farm. He would have helped out here and there when he was full-time employed in his "real" job but never received a penny. Clear?

Grand, so he worked and and was a registered employee. His parents didn't pay tax on his behalf.

He probably does owe revenue then in that case.

Franz Von Peppercorn

Doing Anything legal here will drop the parents into it. He could ask for 4K from them though.

Franz Von Peppercorn

troyzer wrote: »

Grand, so he worked and and was a registered employee. His parents didn't pay tax on his behalf.

He probably does owe revenue then in that case.

You’re not following this at all.

troyzer

Franz Von Peppercorn wrote: »

You’re not following this at all.

I think I'm starting to agree. Either the OP is making absolutely no sense or I'm not following.

*Actually, I just noticed that the OP is claiming that 2013 is the only year that revenue are chasing.

If this is true, why mention work before then at all? It's completely irrelevant and it's what I got hung up on.

I also have no idea how Revenue could think he owes them on €10k from one year. That would be some second job to be paying €10k.

cruizer101

2012 and 2013 are separate tax years

2012 he worked on the farm
2013 he didn't work on the farm but that is the year he was supposedly paid 10,00 by the farm, that year he was working elsewhere

Its really not that complicated

troyzer wrote: »

*Actually, I just noticed that the OP is claiming that 2013 is the only year that revenue are chasing.

If this is true, why mention work before then at all? It's completely irrelevant and it's what I got hung up on.

I also have no idea how Revenue could think he owes them on €10k from one year. That would be some second job to be paying €10k.

Its mentioned because it is relevant that he had previously worked for that employer

10k isn't that huge, 200 a week, say one or two evenings and a saturday, 15 hrs at 13 quid an hour easily doable and revenue don't care if they are getting the tax from it

calgary bound

troyzer wrote: »

I think I'm starting to agree. Either the OP is making absolutely no sense or I'm not following.

*Actually, I just noticed that the OP is claiming that 2013 is the only year that revenue are chasing.

If this is true, why mention work before then at all? It's completely irrelevant and it's what I got hung up on.

I also have no idea how Revenue could think he owes them on €10k from one year. That would be some second job to be paying €10k.

I never said he owed them 10k???

Franz Von Peppercorn

troyzer wrote: »

I think I'm starting to agree. Either the OP is making absolutely no sense or I'm not following.

The husband worked and was paid on his family farm until 2012 but was not paid after. He got a full time job in dec 2012.

Revenue have deducted taxes due on income claimed they were told he received in 2013 which he didn’t get.

Seve OB

troyzer wrote: »

Grand, so he worked and and was a registered employee. His parents didn't pay tax on his behalf.

He probably does owe revenue then in that case.

you don't understand how paye works

employer is liable to pay the tax if they pay a net wage

calgary bound

Franz Von Peppercorn wrote: »

The husband worked and was paid on his family farm until 2012 but was not paid after. He got a full time job in dec 2012.

Revenue have deducted taxes due on income claimed they were told he received in 2013 which he didn’t get.

That's it spot on.

Seve OB

troyzer, the OP is making perfect sense.

I think you should quit ( at this point I was tempted to say "while you're ahead" but you are clearly nowhere near, so i'll just go with) before you dig the hole any deeper

troyzer

Lads, I got it now.

Took me a few attempts (having a slow day).

Sounds like it would be fairly straight forward to fix. I would have thought the parents would be due employer PRSI refunds as well.

Mrs OBumble

Mother in law ( says she) doesn't know about it. I wonder what father in law knows ... and will say.

This is the sort of thing that family feuds start from.

august12

cruizer101 wrote:

Its really not that complicated

I agree, it's not that complicated and quite easy to understand the OPs point, husband was allocated an additional 10,000 in salary from family farm but the same year he took up full time employment after college, this then created an additional tax which somehow was not included in husband's income tax returns and came to light in an audit of farm accounts, this triggering a clawback through the husband's tax credits i.e approx. 800 per year or 3500 to 4000 clawback which hopefully the parents may now refund to said son.

Franz Von Peppercorn

Could be the accountant messed up and charged to 2013 what should have been charged to 2012.

(If it was charged to 2012 then the farm could offset it as expenses and the husband wouldn’t have owed anything. Delaying by a year caused the issue).

Op I assume your husband was paid weekly and not all in one go?

august12

troyzer wrote:

Sounds like it would be fairly straight forward to fix. I would have thought the parents would be due employer PRSI refunds as well.

How in the name of all that is holy could they be due prsi when they claimed the son was employed with an income of 10,000. The only way to settle this is within the family, as far as revenue is concerned, the son was employed during that year, the accounts returned to revenue confirm this.

troyzer

august12 wrote: »

How in the name of all that is holy could they be due prsi when they claimed the son was employed with an income of 10,000. The only way to settle this is within the family, as far as revenue is concerned, the son was employed during that year, the accounts returned to revenue confirm this.

Would Revenue consider the issue closed even if they showed he wasn't working there?

august12

troyzer wrote:

Would Revenue consider the issue closed even if they showed he wasn't working there?

This would open a big can of worms I would think and possibly a major family feud. The strange thing about all this is, he probably did work the equivalent of 10,000 euro for the year, it is easily solved by refunding the loss of tax credits, any reasonable family would agree to this.

troyzer

august12 wrote: »

This would open a big can of worms I would think and possibly a major family feud. The strange thing about all this is, he probably did work the equivalent of 10,000 euro for the year, it is easily solved by refunding the loss of tax credits, any reasonable family would agree to this.

Why would it start a feud for the parents to go to Revenue and say their accountant made a balls of it, the son wasn't working so can you refund the credits?

*Here's some proof*

Oh, by the way, can we also have the employer PRSI back that we wrongfully paid?

I could be ignorant, but I'm struggling to see why this wouldn't be a possibility? The tax was wrongfully paid, why can't it be claimed back from Revenue?

Kristopherus

troyzer wrote: »

Would Revenue consider the issue closed even if they showed he wasn't working there?

Revenue can go back many years to recoup unpaid tax, afaik. Us poor old sods can claim back a refund for only 4 years. Go figure !!!!!

OP,I hope you get your issue sorted. But get started with Revenue before the end of this year.

endacl

How about...

‘So. The 10k that the accounts show I was paid for that year hasn’t showed up in my bank account yet. How about you write me a cheque for it, and we’ll say no more about it”?

Seve OB

august12 wrote: »

This would open a big can of worms I would think and possibly a major family feud. The strange thing about all this is, he probably did work the equivalent of 10,000 euro for the year, it is easily solved by refunding the loss of tax credits, any reasonable family would agree to this.

and still they don't read the simple facts quoted by the OP

CIARAN_BOYLE

troyzer wrote: »

Why would it start a feud for the parents to go to Revenue and say their accountant made a balls of it, the son wasn't working so can you refund the credits?

*Here's some proof*

Oh, by the way, can we also have the employer PRSI back that we wrongfully paid?

I could be ignorant, but I'm struggling to see why this wouldn't be a possibility? The tax was wrongfully paid, why can't it be claimed back from Revenue?

The issue on the parents point of view is that they probably reduced their tax bill by claiming the son's income as a taxable expense.

It might be easiest to resolve informally within the family as amending a tax return from 4 years ago makes you more likely to be subject to a Revenue audit which could cause stress and bring up other tax dodges used by the accountant.

28064212

troyzer wrote: »

Why would it start a feud for the parents to go to Revenue and say their accountant made a balls of it, the son wasn't working so can you refund the credits?

*Here's some proof*

Oh, by the way, can we also have the employer PRSI back that we wrongfully paid?

I could be ignorant, but I'm struggling to see why this wouldn't be a possibility? The tax was wrongfully paid, why can't it be claimed back from Revenue?

"Grand so, here's your €860 PRSI refund.

Now about that €10,000 that you didn't pay tax on, and your fraudulent submission to Revenue..."

calgary bound

Thanks everyone for your advice. We will hopefully be able to resolve things without any issues. I will report back once we know more.

august12

Seve OB wrote:

and still they don't read the simple facts quoted by the OP

I know what was stated by the OP, but we are talking 5 years ago, I don't remember last year nevermind 5, anyway, this isn't the issue, going to Revenue also isn't an option given we are talking about immediate family here, unless the OP wishes to cut all ties with the in-laws, and the parent or parents would have been well aware what the accountant did but probably not aware of the consequences.

Seve OB

august12 wrote: »

I know what was stated by the OP, but we are talking 5 years ago, I don't remember last year nevermind 5, anyway, this isn't the issue, going to Revenue also isn't an option given we are talking about immediate family here, unless the OP wishes to cut all ties with the in-laws, and the parent or parents would have been well aware what the accountant did but probably not aware of the consequences.

in fairness it is not for you to speculate on what happened to someone else 5 years ago when they have a clear audit trail to contradict your opinion.

it is also not for you to rule out options available to the OP nor is it for you to speculate on the repercussions of them availing of said options.