What if I was to tell you that I would give you €1,076 for four hours of work? And what’s more, that’s cash in hand – the taxman won’t take a cent of it.
Let’s break that down, that’s €269 per hour. Interested? That’s the average amount of money that people get when they claim their tax back over four years.
Put the wheels in motion
So how do you get that money from Revenue’s bank account into yours? It’s going to require a bit of paperwork and digging around for receipts, but the effort is worth it, especially coming up to Christmas.
You can claim your tax back in two ways. There is the DIY route where you apply yourself through Revenue. The alternative is to do it through your farm accountant or services such as Taxback.com.
Both have their pros and cons. Applying through Revenue.ie is straightforward enough. You set up your online log in on Revenue’s Online Service (ROS) and you fill in the necessary documents to make your claim. The pros are that once the claim is made, all the money that is owed goes straight into your bank account. However, there is a bit of work involved in it and you might not be aware of everything you can claim.
The other option is to go through a company such as Taxback.com. You sign up for the service and an employee will be assigned to your case. They will ask you some questions to ascertain what reliefs you can claim for. The onus is on you to track down your receipts, but once that is done they will file everything for you.
There is a fee involved for them to do this work for you. They operate on a no-refund, no-fee basis so if you don’t get anything back you don’t need to pay them. However, if you do get a refund, their charge is 10%. The pro though is that a company like this wants you to get the biggest claim possible (after all, that means they get a bigger fee). So while you might navigate your way through Revenue yourself and claim back €500 for example, an actual accountant looking at your form may be aware of reliefs that you didn’t even know about. The average claim that is made over four years is €1,076 so even though, they will take €107 from your claim, you still may be left with more money by seeking financial advice.
No matter what avenue you make your claim however, there are some reliefs that are real cash earners.
Unless you’re the healthiest person, most of us have been to the doctor sometime in the last four years. And you can get 20% on most of those receipts. So even if you only made one GP once a year, that’s already €48 that you are owed (assuming your GP is €60 per appointment). But there is so much more that you can claim for than just a GP visit. It includes all dental appointments, consultant appointments, hospital clinics, IVF treatment, nursing homes. You can also claim for acupuncture, trips to the physiotherapist, even a trip in the ambulance as well as all your prescriptions. This relief is a real money earner and the average pay back over four years just for this relief alone is nearly €494.
This relief has been in place for a while but since many started working from home during the pandemic, it could add an extra €100 a year to your claim.
You can claim back for your heating, electricity and broadband bills. You need to gather those utility bills for the year. Then you calculate how many days you worked from home and you can claim back 30% of your broadband bills based on those days. Gas and electricity is claimed back at a rate of 10% but that changed in Budget 2022 and will also be at a rate of 30% from 1 January 2022. Based on an annual utility bill of €2,600 (estimating €1,000 electricity, €1,000 gas and €600 broadband), you could be entitled to €99 if you worked from home through the pandemic last year.
You can get 20% back for tuition fees paid, up to a maximum of €3,000 per year. That’s potentially €600 in your pocket and if you paid for a two-year master’s, that could be €1,200. This really benefits people in their 20s that have finished college or equally people in their 50s or 60s that paid for their children’s tuition fees.
Flat rate expenses
A flat rate expense is a tax relief available to people in certain occupations and one of the easiest expenses to claim. It’s there to help with costs associated with work, for example uniforms, tools and equipment. And there is a large range of professions eligible to claim. Agricultural advisers, vets and veterinary nurses, those working in the building industry, carpenters and plumbers, engineers, shop assistants, people in the civil service, consultants, nurses and dentists, anyone in the hotel sector – the list is extensive. The amount you’re entitled to depends on your profession but agricultural advisers for example can claim up to €671 every year, which if you haven’t claimed in the last four years is €2,684.
Year of marriage tax relief
In your year of marriage or civil partnership you’ll be taxed as a single individual. However, if you paid more tax individually in that year than you would have if you were taxed as a couple, you can claim a refund of the difference after 31 December.
Nursing home expenses
If you pay for yourself or a loved one to be cared for in a nursing home, you can claim tax relief at your highest rate of tax (up to 40%).
Home carer tax credit
Married individuals may be entitled to claim this tax credit – worth €1,600 - if they care for a dependant child or elderly person at home.
By renting out a room in your house you can earn tax-free income as long as it doesn’t exceed €14,000 in a tax year.
Healthcare for children
You can claim relief for additional health expenses if the healthcare is for a qualifying child (under 18 years of age/or child over 18 years in full-time education). This includes, for example, educational psychologist and speech and language therapy.
Finally, many people are unaware that if you pay to get a COVID-19 PCR test privately, you can claim tax back.
What can I claim for?
You can claim back expenses for the past four years. This means up until 31 December, you can claim back for expenses from 2017, 2018, 2019 and 2020. You can claim for 2021 after 1 January 2022.
It is estimated that close to 70% of people do not claim back their expenses. Irish Country Living asked Barry Cahill from Taxback.com why there is such a reticence.
“There are two main reasons,” says Barry. “First, people think it’s a lot of work, but we have found that we get a lot of repeat customers. Once someone claims their tax back once and realises it’s not as daunting as they thought, and that the return is more than worth it, they are much more likely to start doing it on a regular basis.
“The other reason is that people think they will owe the Revenue money.” This can be the case. If you file your tax returns and the Revenue finds that they are owed money, that money has to be paid back.
“However, in 95% of cases, we have found that people are owed money from the Revenue, rather than the other way round,” says Barry.
There is more reticence this year especially if you availed of the COVID-19 Temporary Wage Subsidy Scheme (TWSS) or the Pandemic Unemployment Payment (PUP) during the pandemic.
Barry explains: “We have an Employee Financial Wellbeing service and in a review of the first 500 employees to take part in the scheme, we found that a tax underpayment arose in 75% of cases where the employees had received the PUP in 2020, and 86% of cases where the employee had been put on the TWSS.”
However, it isn’t all bad news. Barry says, most of the employees who engaged with the service were able to offset some, if not all, of the monies owed by claiming the reliefs listed above.
Another interesting finding was that some employers only engaged with TWSS for a short time and have since paid back the subsidy to the Revenue Commissioners, so, their employees have actually ended up in a refund position. The average refund in these instances was €635, with some employees even receiving a refund of over €6,000.
Barry explains: “The Financial Wellbeing Service was launched this year and it is a service for employers where they pay the fee for their employees to have their tax review done. Companies are finding that perks such as having a gym or subsidising lunches are not as relevant as they used to be with people working from home but this is a really tangible benefit that they are offering employees that is putting money in their pocket.”