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Every year thousands of euros remain unclaimed by taxpayers.  Taxes are overpaid due to inefficient transfer of bands between married couples i.e. one person paying tax at the 42% rate and the other not using up their 20% band rate as well as taxpayers not claiming reliefs, credits and exemptions that they are entitled to. 

Certain categories of taxpayers can increase their tax credits to compensate them for expenses occurred due to the nature of their work i.e. blocklayers, nurses, carpenters etc.  Where employees used their private cars for business purposes, re-imbursement in respect of allowable motoring expenses can be effected by way of flat-rate mileage allowances of up to 39 cent per mile.  When employees have to be absent from the work place for a period of time an overnight allowance is available of up to €133.72 and a day allowance of up to €37.90.

A long list of tax credits are often not claimed by the entitled taxpayer such as Age Tax Credit, €205 per person, claimable by a person where he or his spouse is at least 65 years of age during the year of assessment.   Dependent Relative Credit is claimable if a person maintains at his own expense:
· a relative of his or his wife who is incapacitated by old age or infirmity from maintaining himself, or
· his or his wife’s widowed mother, or
· his son or daughter who is resident with him and upon whom he is dependent by reason of old age or infirmity.

A tax credit is also claimable by an individual where he/she employs a person to take care of a family member who is totally incapacitated by old age or infirmity. 

Income tax relief is available at the marginal rate in respect of certain medical expenses incurred by an individual on behalf of either:
(i) himself/herself
(ii) a relative
(iii) any other persons over 65 years of age or permanently incapacitated (mental or physical).
The amount of expenses qualifying for relief is the excess of the cost over €125 for an individual or over €250 for an individual and his/her relatives/other persons.

Relief is available at the standard rate in respect of premiums paid on qualifying insurance policies designed to cover – in whole or in part – for future care needs of individuals who are unable to perform at least two activities of daily living or are suffering for severe cognitive impairment.

A tax credit may be claim in respect of subscriptions paid for membership of a trade union the maximum tax credit being €26.

A tax credit of €254 for a person under 55 years and €508 for a person over 55 years, may be claimed by tenants for rent paid in respect of rented residential accommodation which is their sole or main residence.

Tax relief at the standard rate is available in respect of certain third level education fees paid to approved colleges.

Tax relief at the standard rate may be claimed for tuition fees ranging from €315 to €1,270 in respect of approved training courses.

A tax credit is granted in respect of local authority service charges, which are paid in full and on time by the person liable for them or by another person who resides on the premises to which the service charges relate. 

Relief is also given for pension contributions up to a maximum of 30% dependent on age of net relevant earnings.  There is an earnings cap of €254,000 on net relevant earnings.  Contributions may be made until an individual reaches 75 years of age.

Relief may be claimed by both individual and companies for donations to Charities and other approved bodies.  The minimum donation in any tax year is €250.

Total exemption from income tax is available to an individual under 65 years of age whose total income does not exceed €5,210 for an individual over 65 years €15,500.  The exemptions limited are increased by 575 for each of the first two qualifying children that a claimant proves has lived with him/her at any time during the tax year and by €830 per child for each subsequent child.  Marginal relief is available where the total income exceeds the above limits.  Thus an individual who has worked and was taxed on their earnings for part of the year may be entitled to a refund when the earnings are spread out over the full year.  The above limits are doubled for couples.

A large proportion of people have still not completed a TRS form to obtain Tax relief for home mortgage interest (secured loans).  This relief is not given through the tax system but is instead granted at source. Mortgage repayments are reduced by the amount of the tax credit due. For example, if the interest element of your mortgage repayment per month is say €100, your mortgage lender will reduce your monthly mortgage payment by €20 per month. This reduction is the same as giving tax relief at the standard rate of tax (20%).

An individual who was an employee, an unemployed person or was made redundant recently and forms a company to start their own business may be entitled to avail of the tax refund available under the Seed Capital Scheme.  You could receive all the income you have paid over the previous six years, if your investment was big enough.

This is just a proportion of the reliefs and exemptions that are available and are often unclaimed by taxpayers.  Taxpayers would be advised to have a Tax Consultant review their returns and quantify what refund is claimable.  A taxpayer may review back 6 years if undertaken before 31 December 2004.

Louise Carey is a Tax Consultant and Accountant with an Office at 21 Church Street, Listowel, Co Kerry.  She may be contact on 068 21109, email: lc@taxconsultant.ie, website: www.taxconsultant.ie.