19 Aug 2022

EXPLAINER: Will you be getting a tax bill or a refund from Revenue due to Covid payments

EXPLAINER: Will you get a tax bill or a refund from Revenue due to Covid payments

EXPLAINER: Will you get a tax bill or a refund from Revenue due to Covid payments

Revenue has published provisional statistics in relation to the preliminary end of year tax position for all PAYE taxpayers for the year 2020

It reveals that 43% had a balanced position, meaning they paid the right amount of tax while 30% overpaid tax and/or USC totalling €436m but 27% underpaid tax and/or USC totalling €458m.

According to Revenue, provisional data also indicates that over 706,000 taxpayers are in a refund position.

For those PAYE taxpayers that were in receipt of one or more of the wage supports during 2020, about 47% are either due a refund or have no additional liability.

A further 23% have an additional tax liability of less than €500 and a further 15% have an additional tax liability of between €500 and €1,000. 

The Preliminary End of Year Statement sets out a provisional tax position for 2020, based on information available on Revenue records, including any Temporary Wage Subsidy Scheme (TWSS) payments reported by the individual’s employer and/or Pandemic Unemployment Payment (PUP) amounts received from the Department of Social Protection.

Revenue says is very aware that underpayments could cause financial difficulties for some people and wish to reassure these taxpayers that collection will not start until January 2022, one year from now.

Collection of the amount owed will be spread over four years, which means an underpayment, for example, of €1,000 will be collected in amounts of just under €5 per week.

Revenue added that 143,000 PAYE taxpayers have already submitted income tax returns for 2020 which, in many instances have included claims for additional tax credits such as health expenses, nursing home fees and contributions made to an AVC.

These additional credit amounts will be taken into account when calculating the end of year position for these taxpayers and are reflected in the provisional statistics. Revenue says that this is one of the reasons why it is seeing some larger overpayment amounts.

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