If you are unsure what all the media coverage is about with thousands of PAYE and self-employed workers now owing more tax due to Covid-19 supports, then please read our article post where we explain all.
We will go through some ways to hopefully put more cash into your pocket!
Thousands of PAYE and self-employed workers who have received the Pandemic Unemployment Payment (PUP) or the Temporary Wage Subsidy Scheme (TWSS) are set to face tax bills.
The payments were not taxed in real-time and instead are liable to income tax and possibly universal social charge (USC) at the end of the year.
Revenue has said over 400,000 workers in receipt of PUP or the wage top-up (TWSS) will owe tax to Revenue.
Taxpayers will be given the option to pay this partially or in full. Where you decide to make a partial payment or no payment, Revenue may reduce a person’s tax credits starting in 2022.
In effect, what this means is that you will receive less take home pay from your employer and Revenue get paid the underpayment of tax from your salary over the four year period 2022 to 2025.
It is important to note the Revenue statement that you will receive is really just a notification and no immediate action is required.
This Revenue statement is an opening position so to speak. Taxpayers will then be asked to file a tax return to finalise their tax liability or refund.
As this is the first time that many PAYE workers will be required to file a tax return please rest assured that we will be here to help if you so require.
We may even be able to reduce your preliminary tax liability or even turn it into a Refund.
Completing a tax return enables individuals and married couples / civil partnerships to review their tax credit entitlements and other reliefs that could lead to a tax refund.
Examples that could lead to a tax refund include the following;
- Stay and spend tax credit
- eWorking from home
- Paying tax at the emergency rate
- Medical / Dental expenses
- Flat rate expenses
- Tuition fees
- Single parents and home carers credit
We can even review these for the last four years.