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Are you in line for a windfall from the Revenue? More than 360,000 households overpaid tax in 2021

Large increase in number of people who overpaid taxes, officials believe. But refunds can only be claimed by completing a tax return

Thousands could be due a tax refund, after overpaying in 2021. Photo: Stock image

Gabija GataveckaiteIndependent.ie

As many as 366,000 households could be in line for a rebate after overpaying their taxes last year, Revenue has said.

The estimate relates to households that have not yet submitted their returns for 2021.

A leading expert believes they may be putting off filing after being hit with an unexpected extra bill for 2020 due to receiving the pandemic unemployment payment (PUP).

But hard-pressed households that have unwittingly overpaid taxes for 2021 through the PAYE system could be in line for refunds in the coming months – but they must file their return to find out.

Marian Ryan, consumer tax manager with Taxback.com, said households overpay taxes due to a variety of factors that can include changes in their circumstances such as marriage, divorce or getting a new job. She said some people may also not be claiming tax relief they are entitled to, such as for remote working, medical outgoings or non-routine dental expenses.

Because they are not aware they are entitled to them, they are overpaying tax and are entitled to money back from Revenue.

Ms Ryan said the increase in the number of people who have overpaid tax this year is likely due to those who underpaid during the pandemic and are now ignoring their 2021 returns.

The 366,000 who could be in line for a refund this year is 100,000 higher than last year.

“They are funny years, 2020 and 2021, as the vast majority of people who would have got the wage subsidy or the PUP ended up with underpayments for a long time,” Ms Ryan said, meaning they ended up owing Revenue more money than they thought.

These people may be “fearful” to submit their returns in case of another underpayment via the PAYE system, when in reality they might have actually overpaid.

“They may have their heads in the sand and don’t want to deal with 2021,” Ms Ryan said, adding that it is rare for employers to make mistakes when taxing employees.

A spokesperson for Revenue denied there would be pressure on staff to process refunds, saying the “vast majority” of returns are submitted online and do not require Revenue staff’s direct involvement.

Of the households that have filed their tax returns for last year, figures show 736,000 are entitled to refunds, an increase of 33,000 from 2020. However, this is much lower than in 2019, when 846,000 people overpaid.

Figures also show 233,000 households were estimated to have underpaid their taxes last year, much fewer than the 402,000 in 2020.

Labour TD Ged Nash said any tax owed as a result of the Temporary Wage Subsidy Scheme (TWSS) during the pandemic should be waived.

“What I’ve been arguing since January of last year is for the scrapping of those tax bills. Most of the workers on the TWSS, they had no choice and are generally on low or modest incomes,” he said.

“They were the people in the crosshairs during the darkest days of the pandemic. The last thing they need now in the context of a cost-of-living crisis is a tax bill.”

It has emerged that nearly a quarter of calls to the Revenue jobs and pensions helpline were abandoned by callers facing lengthy waiting times.


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