According to Revenue, 30 per cent of PAYE taxpayers in Ireland overpaid in tax in 2020, which means that for this year alone 706,000 taxpayers are in a refund position.
On the back of this information, tax refund specialists Taxback.com have released their Customer Index 2020, to demonstrate to the thousands of taxpayers who are owed money, exactly what they could and should claim for.
Tax refunds on medical expenses have topped the poll once again, when it comes to the most common tax reliefs that PAYE taxpayers claimed for in 2020.
The index, which looks at the refunds that Taxback.com’s clients applied for and received over the last 12 months, found that the older the applicant the higher the average refund, while the top three industries for refunds were the religious sector, the legal profession and the IT industry.
Speaking of the findings, Marian Ryan, consumer tax manager of Taxback.com, said: “In a year where many families and households have had to get to grips with job losses or a loss of income due to the restrictions, every penny counts. So, it’ll come as a welcome boost to many to hear that the overall average tax refund claimed through Taxback.com in 2020 came in at approximately €1,076 over four years.
“The usual suspects of tax credits for medical and dental expenses, flat rate expenses, and tuition fees dominated refunds yet again, but we would expect to see some change in this in 2021, as more people avail of the eWorker relief and perhaps take part in the Stay and Spend Scheme.
“Revenue figures suggest that approximately 706,000 taxpayers are due refunds for 2020 alone — but if you take in account the fact that you can claim for four years previous, the actual number of people due a refund would be far higher."
The older the better when it comes to refunds
One of the most notable distinctions from this year’s index is the rate of increase in the value of refunds proportionate to the age of applicants. In short, the amount of refund claimed was found to increase significantly with age of the applicant.
The average refund for the 25-34 age group over four years was €1,917 while the average for the 45-54 age group was €2,864.
The highest average was the 65+ group, at €3,692.
Ms Ryan said: “We found this year that applicants over 35 stood to gain the most by claiming their tax entitlements, particularly if they hadn’t submitted a claim in the last four years. As people’s salaries increase, so too does the amount paid in tax, so it stands to reason that there are more lucrative refunds available for those in higher age, and likely pay, brackets.”
Tax refund top 10
- Medical Expenses
- Tuition Fees
- Flat Rate Expenses
- Working from Home Relief
- Home Carers Credit
- Nursing Home Relief
- Rent a Room Relief
- Employing a Home Carer Tax Relief
- Dependant Relative Credit
- Home Renovation Incentive and Rent Relief (both have now been phased out but can still be claimed for retrospectively in certain circumstances
The top five industries for tax refunds are: retail, building and related trades, hotel and bar workers, hospital and health services and engineering and electrical workers.
Ms Ryan said: “While the numbers of people applying for a tax refund is on the up, for example Revenue figures for medical expenses show that 522,800 people applied for the relief in 2018, which is up eight per cent on the 2017 figure of 482,200, they are still quite low considering the number of taxpayers in the country — most of whom will have had some medical expenses over the last four years that they could claim for.
"Many people are still unwilling to apply for a tax refund possibly because they believe it’s a difficult process or a ‘hassle’, but the reality is it’s very straightforward, and only requires a little prep in terms of keeping receipts, or following up with your health practice or dentist etc. to obtain the ones you don’t have. In terms of any apprehension regarding contacting Revenue — if you are tax compliant, which the majority of the taxpaying public are, then there is absolutely nothing to fear by submitting a tax refund application.”
