November 24 2020
Read on to find out how to USE before you lose when it comes to tax relief and other employee benefits. Reading time 2 minutes.
The phrase USE it or lose it, has many connotations. One of these is that it highlights a major flaw of traditional budgeting whereby business units and agencies busily and sometimes recklessly go about spending all of the money allocated to them before the end of the year.
Understandable when you consider that if they don’t, the money goes back to the central pot, whether that be government or head office, and they risk a cut in their budget allocation for next year. Understandable but not necessarily the most effective way to allocate resources.
Perhaps we’re not in a position to influence how organisational or governmental resources are allocated or spent but we can influence our own personal financial situation. So, at this time of year, it’s important for us to consider what benefits or reliefs we may have that we need to ‘Use or lose’ before the end of the year.
When it comes to Revenue, workers can go back four years to claim tax refunds. This means that if you haven’t already, you must claim a refund for 2016 before the end of the year. It is estimated that there are hundreds of millions of euro in unclaimed tax refunds in Ireland. So, if some of that money is yours, make sure to claim it.
The most common unclaimed refunds include those available for health expenses and third level tuition fees. Believe it or not, Revenue actually want people to claim their reliefs and have made the process relatively smooth.
The easiest way to claim your tax relief is to complete an Income Tax return. For PAYE workers, this means registering for myAccount with Revenue. In 2020, it became necessary for PAYE workers to register for myAccount in order to access their ‘Employment Detail Summary’ or ‘the document formerly known as P60’ if you prefer 😉. So, chances are you’re already registered and if you’re not, get to it!
Self-employed people will be familiar with the tax return process as it is mandatory to submit annual returns. Some PAYE workers, not so much, hence the hundreds of millions of euro in unclaimed refunds.
If you completed a tax return in the past, perhaps because you were randomly selected by Revenue to do so, and you shudder at the memory, I assure you it has become much easier. The improvements in Revenue’s systems and with most of our supporting documents such as bills and receipts now accessible and capable of being stored online, the task of completing a tax return has become a breeze or at the very least is nowhere near as daunting as it once may have been.
So, with Christmas 2020 and year-end fast approaching, make sure to urgently claim any tax relief due to you from 2016 by logging into myAccount, clicking on the ‘Review Your Tax’ link in PAYE Services and selecting ‘Income Tax Return’. Follow the same process for 2017 and 2018. For 2019, click ‘Review Your Tax’, select ‘Statement of Liability’ and ‘Complete Your Income Tax return’. Easy!
The vast majority of people who claim relief online receive their tax refund, if due, in five working days. A nice little boost to your coffers before Christmas. Further information, step-by-step guides and worked examples are available on the Revenue website so no excuses!
In addition to tax reliefs, many workplace perks and benefits must be used within the calendar year. This can include pension benefits, share based incentive schemes, annual leave entitlements, refunds of gym or club memberships. Some companies may even reimburse you for any expenditure that supports your well-being.
Make sure you’re educated about what benefits are available to you and then decide whether and how you would like to avail of those benefits. If you chose to support your financial well-being, I’d love you to consider Money Coaching Ireland. To find out if money coaching is for you, book a free discovery call today.
The material contained in these blog posts is intended for educational and entertainment purposes only. No responsibility is taken by Money Coaching Ireland for actions taken or not taken by individuals as a result of reading/watching/listening to these posts. Money Coaching Ireland recommends that individuals seek professional advice prior to making any significant financial decisions.