PAYE workers could claim back a bumper €500m in tax
Revenue says it owes employees refunds worth over half a billion euro
THE Coalition may be gearing up for record tax cuts in its preelection budget but new figures reveal that PAYE workers can secure a significant cut in their taxes simply by checking their Revenue accounts.
Dáil questions from Sinn Féin’s Pearse Doherty have revealed that, in 2022 alone, taxpayers who checked their payments received refunds of €567m.
Commenting on the revelation, Mr Doherty said: ‘It is worrying that people are missing out on what can in some cases be substantial repayments in the thousands of euro.
‘There is a need to counter the unease people feel about reaching out to the Revenue.
‘The fact is that those who have sought refunds have benefited to the tune of hundreds of millions of euro,’ he said.
Revenue, however, believes that more than half a billion euro in overpaid tax has still to be claimed back.
The rise in the number of people in employment means it’s thought that the figures for 2023 will be significantly higher still.
And Finance Minister Michael McGrath has also revealed that more than €624m is still owed by the Revenue to taxpayers.
Mr McGrath said that, since 2019, Revenue has had an Employment Detail Summary (EDS) and a Preliminary End of Year Statement (PEOYS) available to all PAYE taxpayers through its ‘My Account’ online service after the end of each tax year.
The PEOYS provides employees with a preliminary calculation of their income tax and USC position and indicates whether their tax position is balanced, underpaid, or overpaid for the year.
Mr McGrath claimed that, to assist taxpayers, Revenue frequently issues letters to employees who, according to their preliminary end of year statement, may have either overpaid or underpaid tax in a given tax year. The letters also remind taxpayers of a four-year time limit in respect of submitting such claims.
Mr McGrath revealed that, to date, Revenue has refunded €487m to over 825,000 taxpayers for the 2019 tax year; €441m to 695,000 taxpayers for 2020; €567m to 830,000 taxpayers for 2021; and €567m to 760,000 taxpayers for 2022.
The figures also reveal that just over €2bn (€2.026bn) was repaid to taxpayers between 2019 and 2022 with figures for the last two available years topping half a billion euro annually.
Mr McGrath warned, however, that in order to claim a refund of overpaid tax, taxpayers are required to complete an income tax return, which can be done through the Revenue’s ‘My Account’ online service.
The minister also revealed that more than €624m is still owed by the Revenue to taxpayers. This is based on the provisional end-of-year position for PAYE taxpayers who have yet to submit an income tax return.
The initial figures indicate that, for 2019, €108m was overpaid by 212,661 customers. For 2020, 186,000 taxpayers overpaid €93m. For 2021, €147m was overpaid by 257,790 customers, while for 2022, 308,560 customers overpaid €176m.
Meanwhile, taxation has emerged as a surprise election issue in the wake of Mr McGrath’s audacious move to seize the tax-cutting agenda.
Speaking to the Irish Mail on Sunday, the Finance Minister emphasised again his pledge to continue cutting income taxes for workers.
‘On coming into office in 2020, the three parties in Government agreed policy on income tax and this has been implemented since,’ Mr McGrath said.
‘I was very pleased to introduce a package of €1.5bn of income tax cuts in my first budget as Minister for Finance last autumn.
‘People are now seeing the benefit of this.
‘The package involved increasing tax credits, raising the entry point to the higher rate of income tax, and introducing the first reduction in a USC rate in five years,’ he said.
‘Speaking at the annual dinner of the Irish Tax Institute recently, I said I’m looking forward to introducing a further substantial income tax package in this autumn’s budget.
‘I believe it is very important that Ireland has a competitive system of personal taxation and I believe we can make further progress on this in the last budget of the current Government.’
The move has infuriated Fine Gael, with one senior party source saying Mr McGrath is ‘effectively thieving Fine Gael policy’.
One senior Fine Gael source warned: ‘If McGrath wants a tax war with us, we will give it to him. We are not going to suffer the indignity of being outbid by Fianna Fáil.’
And another Fine Gael source said: ‘He is a wolf in disguise. He is essentially taking over our tax agenda by stealth.’
Fine Gael has taken a significantly more modest approach to tax cuts since Mr McGrath and Paschal Donohoe shot down Leo Varadkar’s plan for a new 30% tax rate.
The Finance Minister also reacted sharply last year when three Fine Gael junior ministers – Martin Heydon, Jennifer Carroll MacNeill and Peter Burke – called for substantial cuts in personal taxation. Subsequently, Mr Varadkar said of the 30% tax rate: ‘It was never a party policy, but facts don’t matter.
‘What is our party policy is that we have this target of getting to the point where you don’t have to pay the highest rate of income tax until you earn €50,000,’ he said.
But he also conceded that while ‘we’d like to get to €50,000, I don’t think that will be done by the next budget but that remains our target, our policy’.
‘It is worrying that people are missing out’