To give this blog its full title I should call it Tax Refunds and the Millions Left Out There. Hundreds of millions. And it’s your money. Plus, Revenue don’t make it easy for you to get it back. It’s locked away in their secure vault! I’ve had a few different meetings in the last few weeks. In those meetings, we found thousands owing. Let’s look at
- Married Couples
- Single Parents
- Married couple – one working
- Summary
Married Couples
Mary and her husband Dan moved to Ireland in 2019. Mary is a DON. Not Don Corleone but the Director of Nursing in the local nursing home in Tipp Town. Her salary is €60,000. Dan works for the local council and earns €25,000. That’s all good, so it seems. Mary sends me her tax credit certs for 2023 and 2024.
I can see that she pays tax as a single person. Her lower rate band for 2023 is €40,000 and is €42,000 for 2024. They got married years ago but there’s nothing on Revenue’s records about this. Are they losing out? Yes. They have lost out by €9,000 over 5 years from 2020 to 2024. How is that? The difference between what a single person and a married person can earn at the lower rate is €9,000 per annum.
| Year | Single | Married max 1 spouse |
| 2020 | €35,300 | €44,300 |
| 2021 | €35,300 | €44,300 |
| 2022 | €36,800 | €45,800 |
| 2023 | €40,000 | €49,000 |
| 2024 | €42,000 | €51,000 |
Take 2023 as an example. The maximum lower rate band for a married couple is €80,000. Get the single rate for each year and multiply by 2. You would think, when looking at the numbers, that Mary and Dan would pay tax at 20% on the first €80,000 and 40% on the balance. But the increase in the lower rate band doesn’t work like that. The most the higher income earning spouse can get at the lower rate is €49,000. For 2023 there is a cap on the increase in the lower rate band at the lower of
- €31,000 or
- The income of the lower earner – €25,000 for Dan
As such, their lower income rate for 2023 should be €74,000. But as Revenue have set them up as single persons, they got €65,000 at the lower rate.
Tax Refund
Over the 4 years 2020 to 2023, Dan doesn’t earn enough to use all his lower rate band each year. As a result, Mary lost out by not getting the highest lower rate band for being the higher income earner. An extra €9,000 per year at 20% is €1,800.
All is not lost for Mary and Dan. We have fixed the 2024 tax credit cert so that Mary now gets €51,000 and not €42,000 at the lower rate. Plus, she’ll be due a refund of €7,200 [€1,800 x 4 Years] for 2020 to 2023. We are in the middle of getting that back for her.
For clarity here, if Dan was earning €40,000 or more in 2023, then they would have maximised their lower rate band. Between the two of them, they would get €80,000 at the lower rate. They would also get two single credits and two PAYE credits and wouldn’t have lost out. So be mindful of your personal circumstances and have a look at the Revenue site if this doesn’t make it clear.
Single Parents
I have seen two cases of single parents not getting the single parent child carer credit this week. I had a meeting with Edel on Monday morning. She is setting up her own business and the consultation was about that. We have a checklist that we go through with prospects to get all their personal information.
Edel is divorced. Her ex-husband lives in France and she and her daughter Chloe moved back to Ireland in 2021. She rents a house in Kilkenny and Chloe lives with her full-time. She showed me her most recent payslip for January 2024. From that, I could see that her lower rate band for €1,615.38. She gets paid every 2 weeks. So, 26 pay periods for the year.
| €1,615.38 x 26 | €42,000 |
That’s the lower rate band for a single person for 2024. A single parent that qualifies for the single parent child carer credit should get €46,000 at the lower rate. That’s an extra €4,000 that she should be paying tax at 20% on but she’s paying 40%. And that’s before the extra tax credit of €1,750. Her savings in 2024 will be
| €4,000 x 20% | €800 |
| Single Person Child Credit | €1,750 |
| Total | €2,550 |
Lookback
After our meeting, I asked Edel to send me a copy of her 2024 tax credit cert, which she did. As expected, there was no single parent child carer credit or increased lower rate band
Given that her 2024 taxes were set up as single it is very likely her 2022 and 2023 tax credit certs were the same. If this comes to pass, then she missed out on the credit of €1,650 for both years and the increased lower rate band too. Her refund for the two years could get to
| Single Person Child Credit €1,650 x 2 | €3,300 |
| Increase in lower rate band €4,000 x 20% x 2 | €1,600 |
| Total | €4,900 |
We’ll get this back for her, plus help her out with her new business too.
Tommy
Tommy, a friend of mine, sent me a WhatsApp message yesterday.
“Well Colin, weird question, do you know anything about PAYE tax?”
To which I replied that I should do as that’s my line of work. Tommy called me last night and again it was about the single parent credit. He applied for it for 2024 on his myAccount. He has been a single parent since 2015 and never claimed it. I told him that we could go back 4 years and should be able to get the credit each year from 2020 to 2023. We would file tax returns to claim it. I got all the details to include
- Name of his youngest child
- Date of birth
- PPS number
- His bank account details so Revenue could fast-track the refunds
Thinking this would be straightforward, I set off to amend his tax returns for the last 4 years. His income wasn’t high enough to benefit from the extra €4,000 at the lower rate each year. But the credit of €1,650 for 4 years would be worth €6,600 to him.
To my surprise and his disappointment, I couldn’t claim the single-parent credit on his return. There are about 50 different credits and reliefs to claim, but not the single parent. Very frustrating. There are plenty of ways to skin a cat as they say but this cat remains a ball of fur!
In the end, I sent a message to Revenue via the My Enquiries section of his myAccount outlining the details. I asked them to amend his balancing statement for each year to include the credit. I also included all the relevant information that entitles him to it. We await their reply.
2023 Balancing statement
As an aside, Tommy got balancing statements for the last 4 years. This is a summary of your income and tax position at the end of each year. His statement showed that he owed Revenue 10 cents for 2023. The message at the end of the statement said
“This underpayment will not be collected at this time”
I told tax dodger Tommy to set this money aside as Revenue will be back to him someday to collect!
Married Couple – One spouse working
There is a tax credit for a married couple or civil partnership with one spouse working. But the other spouse or civil partner is looking after dependents. This is the home carer tax credit.
I was reviewing a client’s 2023 tax return during the week and thought it odd that she was in a tax refund position. Louise is married to Noel, and they have 3 children. Louise has a super job and earns a great salary. With 3 very active children, they decided that Noel would stay at home and look after the children. He’d be the man to be the designated taxi driver for a few years and they’d save a fortune on childcare costs.
Louise and Noel were due a tax refund of €2,200 for 2023. Of that €1700 was because of the home carer credit. This is available to married couples/civil partners who are
- Jointly assessed and
- Care for a dependent person.
The dependent person can be your child, a person aged 65 or over, or a permanently incapacitated person.
2024
The lad’s kids are all under 18 and would qualify as dependents. I asked Louise to send on her 2024 tax credit cert and the credit wasn’t on her tax credit cert for that year either. I was able to log onto her myAccount and add the credit for 2024. It’s worth €1,800 this year. Her medical insurance credit was €400 lower than it should be too, and we contacted Revenue to sort this.
Louise has been a client of ours for years and had to file a tax return each year because of a rental property. She sold that in 2023 so that will be the last return we need to do for her. We deregistered her for Income Tax, so she won’t have to file a 2024 return. And she is now set up correctly for 2024 by getting all the tax credits she’s entitled to.
Summary
When I was talking to Tommy last night, he said he tried calling the tax office to sort out the single-parent credit. He was waiting forever and gave up in the end. It’s very difficult for people to know their entitlements. But Revenue can up their game. In Louise’s case, they know Noel isn’t working and can see a home carer credit claim each year for the last few years. That credit should be on their 2024 tax credit cert as they have the information.
And what’s even more difficult is to try and get money back from Revenue. Tax returns are very complex forms and doing them online is the only way. But there’s a huge fear about Revenue out there. That’s why hundreds of thousands of people don’t go near them even if they think they are paying too much tax.
The above is a very small sample of 4 different cases, but the combined tax refunds are well over €20,000. Take this across the country and that’s why there are millions owed by Revenue. Your money is in their pockets when it should be in yours.
There are many good people in Revenue but trying to get money out of them is difficult. But when you owe them money, they are super-fast to collect it. We notice this in our office. The replies to My Enquiries messages about paying Revenue are lightning fast. But, not so fast when it comes to refunds.
Do you think you are due a tax refund? Need help to get your money back? If so, start here
