Underpaid tax need advice

Oscar_Madison

Jayzuz OP you have me worried- will look into my own tax affairs now just to make sure I’m not facing similar - best of luck to you - hopefully it will work out ok

GSBellew

https://www.boards.ie/discussion/comment/122301196#Comment_122301196

You could have been working the entire time, but if your employer availed of the wage subsidy scheme this would leave you with income in the year that was not taxed through the PAYE system.

downtheroad

https://www.boards.ie/discussion/comment/122302126#Comment_122302126

Anyone reading this who is married, do not be afraid of joint assessment.

You will never be worse off with joint assessment. And if one spouse earns more than €42k (in 2024) and the other earns less than €42k then you will pay less tax by being jointly assessed.

If one spouse has no income and you have children, joint assessment allows you to claim the home carer credit which is literally free money from the state.

And if you are married with no kids, and one spouse has no income, the spouse with income will pay far less tax with joint assessment.

In summary, get married and avail of joint assessment 😎

downtheroad

https://www.boards.ie/discussion/comment/122302123#Comment_122302123

Log into your Revenue MyAccount

Click "review your tax 2020-2023"

Complete paye income tax returns for the 4 years, and claim all allowable tax reliefs and credits.

New statements of liability will issue for the 4 years, and hopefully reduce that amount you currently owe.

Revenue will recoup the new balance by reducing your tax credits for the next 4 years (2025-2028).

Do yourself a favour and buy a paye tax return course like the one below, best fiver you'll spend.

https://www.patreon.com/user/shop/2023-tax-back-steps-income-tax-return-123035?u=71745697&utm_medium=clipboard_copy&utm_source=copyLink&utm_campaign=productshare_creator&utm_content=join_link

macrubicon

https://www.boards.ie/discussion/comment/122302508#Comment_122302508

Totally - just check they do what you have asked them to do.

All my wife wanted to do was change the civil status while sending in her Medical expenses claim and ticked the box for separate assessment as we both need our own credits. Was someone making a mistake and changing us to joint that mucked things up for us.

downtheroad

https://www.boards.ie/discussion/comment/122305984#Comment_122305984

Takes 2 minutes to fix , either in your Revenue MyAccount or a call to PAYE helpline.

Candlel

https://www.boards.ie/discussion/comment/122301225#Comment_122301225

I know of a case similar to the OP where there was a marriage and then joint assessment but the revenue forms were incorrect so the taxpayers were not paying the correct taxes. But revenue tried to blame the tax payer.

downtheroad

https://www.boards.ie/discussion/comment/122309197#Comment_122309197

And Revenue then would have refunded any tax overpaid.

They aren't the big bad wolf that people try to make them out to be.

Deeec

https://www.boards.ie/discussion/comment/122309197#Comment_122309197

Its the taxpayers responsibility to ensure their tax credits are right not revenue - People dont seem to get this point at all. Your friends excuse that the forms were wrong is nonsense - if the forms were wrong as they put it, they filled them in wrong not revenue.

In joint assessment the tax payer decides how their tax credits and cut off are divided between spouses - this is so important. Most people dont bother doing this though and then blame Revenue when a problem arises. Many also are overpaying tax by not dividing their tax credits and cut off properly and they dont even realise it. Year after year they are overpaying. Remember that Revenue will not tell you that you are due a refund - the taxpayer has to review their situation and claim it

As @downtheroad said earlier everyone should take a little time to understand how tax is calculated. At a basic level tax isnt that difficult. It could put more money in peoples pockets come payday.

CramCycle

https://www.boards.ie/discussion/comment/122301444#Comment_122301444

The amended cert will have a number that you underpaid, check this first, it is very unlikely you owe 10k, even messing up credits, it is very hard to owe that much unless you misclaimed. Most likely it's a percentage of the credits you were mistakenly given twice. Double check all your credits that none are missing, medical receipts etc. Anyway, so a little over 2 or 4 k is more likely. Revenue are very good to deal with. I misclaimed before. I thought I was in the right (still do), they didn't but there was no meanness, just make sure you engage promptly. They just said, I see where you are coming from but you have to pay it back.

Hijpo

https://www.boards.ie/discussion/comment/122312854#Comment_122312854

No indication on the amended certs to say what's underpaid. It just gives applicable tax credits then tax bands for PAYE and USC.

The only place that seems to tell you is the Preliminary end of year statement for each year.

I understand it's tax that hasn't been paid but it's acknowledged that there is a cost of living crisis, we are a single income family of 4, one child in secondary school and the second due to start, I cant afford this. Haven't had the mental clarity to phone revenue yet, thinking about it would give you palpitations.

con747

https://www.boards.ie/discussion/comment/122314956#Comment_122314956

As stated before they are a lot easier to deal with than most give them credit for. Ring them, don't bury your head in the sand and wait for the right time. The right time is asap.

DisgustedTunbridgeWells

Apologies if I misunderstood your issue but if were allocated 10k in tax credits in error then you will owe the tax you would have paid on that 10k, so 2000 (20%) or 4000(40%), not 10k. Also in my experience revenue are very accommodating in that they can stretch any repayment out over a very long period, and they are very understanding in a case like yours s

Hijpo

https://www.boards.ie/discussion/comment/122315304#Comment_122315304

I'm just reading what the Preliminary Statements for 2020 and and 2021 say.

"Based on Revenue's records for 2020, you paid less Income Tax or USC than you were due to pay. This means that you owe Revenue €3,300.01 based on current information."

"Based on Revenue's records for 2021, you paid less Income Tax or USC than you were due to pay. This means that you owe Revenue €2,442.81 based on current information"

Tax credits for 2019 were also incorrect in the same way as 2020 so i presuming it's also €3300 because I can't see the 2019 statement.

shmeee

https://www.boards.ie/discussion/comment/122315706#Comment_122315706

You cannot request a statement of liability that is over 4 years previously.

You man be able to view it in your archived folder in MyDocuments.

Still can't understand how the tax credits were so wrong? Systems don't allow to add double credits etc. So unless you claimed a credit you weren't entitled to maybe?

And as others said, give PAYE a call on 01 7383636 and chat to them, they will be accommodating with this and help you work it out.

And they're your preliminary statements so add your claims for medical expenses etc to reduce what you owe or other reliefs you can claim.

downtheroad

https://www.boards.ie/discussion/comment/122315706#Comment_122315706

€3,300 for 2020 sounds like 2 x tax credits of €1,650, so you need to find out where this error came from.

The answer is in your tax credit certificate and statement of liability for each year. A good tax advisor or accountant will spot this in 5 seconds.

Hijpo

https://www.boards.ie/discussion/comment/122316033#Comment_122316033

Yes this is what happened. My personal tax credits were messed up.

We wanted to be jointly assessed with me taking all my wife's tax credits.

What actually happened was I got my wife's 1650 and my wife got my 1650 which gave us both 3300 each. On top of our employee tax credit of 1650 each we ended up with a net tax credit of 9900, that's just for 2019. This is the PAYE section for 2019.

Hijpo

https://www.boards.ie/discussion/comment/122315923#Comment_122315923

I am not tax savy and have a fear of claiming stuff I shouldn't because I didn't want to want to end up in a mess like this so I never adjusted tax stuff until I wanted to be jointly assessed with all the tax ccredits. Then this happens anyway.

NewbridgeIR

Got one of these last week. Not a scam. Just an email to say I had new correspondence. Small underpayment which I was able to reduce to c€80 by submitting a tax return with an additional credit for medical expenses incurred during 2020. Revenue came back and said it would be dealt with by reducing tax credits for next four years by €20 each year. Also did 2021 while I was online and that was an overpayment of €200 - funds arrived in my bank account two days later.

downtheroad

https://www.boards.ie/discussion/comment/122316091#Comment_122316091

That is messed up,not sure how Revenue system allowed that but it's on their end. Now they will probably say you should have reviewed your tax credit cert to check it was correct, yada yada, but they have made an error here.

The best recourse to you is reduction of your tax credits over the next 4 years to repay the balance. But that is seriously going to hit your net pay. I'd be putting a very angry call in to Revenue on Monday to ask how this error happened on their side, and demand repayment over something like 10 years (doubt they will agree to this but if you don't ask you don't get).

And complete tax returns for 2020-2023 to try to claim back any possible tax credits and reliefs, to reduce the overall liability for yourselves.

Hijpo

https://www.boards.ie/discussion/comment/122317062#Comment_122317062

Yeah that's what I expect also. I didnt see myself as being in a position to tell the tax guys they are after making a mistake and if revenue tell me "this is the tax you have to pay" then that's the tax I have to pay so I didn't look at the tax certs, regarding pay slips, the only thing I pay attention to is net pay.

Interesting conversation on Monday.

Deeec

https://www.boards.ie/discussion/comment/122317107#Comment_122317107

Im not being nosey but do you have a child with a disability or illness ? If so you are entitled to an extra tax credit of €3300.

Macker

I got the same letter and did a review , turns out I owe them 154 euro for 2020 and 20c from 2023

Hijpo

https://www.boards.ie/discussion/comment/122317191#Comment_122317191

No, thankfully the kids are all okay.

Candlel

https://www.boards.ie/discussion/comment/122312794#Comment_122312794

The taxpayer in this case didn't do anything incorrectly. The problem was the revenue system at the time. Revenue did not want to acknowledge there was an issue. Tax payer had to go to senior level in direct talks with revenue to sort it out.

Nowhere did I say my friend made a mistake, quite the opposite.

Hijpo

For anyone interested in an update.

2020 underpaid €3300

After correcting tax credits for medical insurance relief, medical expenses and flat rate expenses underpayment is €2766

2021 underpaid €2442

Corrected tax credits for medical insurance relief, medical expenses and flat rate expenses for 2021. Overpaid 526 in 2022 and overpaid 552 in 2023. Overpayment in those two years offsets underpayment in 2021. Underpayment for 2021 is €1924.

Repayments 2020: €691.70 for four years

Repayments 2021: €211.25 for four years

Thanks for all the replies.