Here are the 5 most popular queries about paying tax in Ireland

More than half of Irish workers are unsure about their tax obligations and may be missing out on entitlements. This is not surprising, as tax rules can be complicated and confusing, yet paying our taxes is a legal requirement. Maybe it’s asking too much to expect all citizens to understand the tax system as it applies to them, and to ensure they pay the right amount of tax at the right time?

Ireland’s first free Tax Clinic was set up in NUI Galway to provide assistance and information to students in the first instance on issues around personal taxation and give them the lifelong skills to handle their own tax affairs. Covid-19 public health advice meant the clinic was fully online. Individual consultations were provided by volunteers under the supervision of professional tax advisors. Following a very successful rollout of the clinic, plans are underway to extend the service to marginalised citizens, in collaboration with community groups in the Galway region.

So what were the issues which students, including many international and postgraduate students, wanted to know about. Here are the top 5 issues our Clinic dealt with.

(1) Where do I stand with the taxman overall?

Many students simply needed help checking up on their overall tax position and reassurance that their personal tax affairs were in order. Several were paying emergency tax, or working multiple part time jobs. Advisors walked them through Revenue’s myAccount system and took them through the basics of the PAYE system, tax rates, PRSI, USC, Tax Credit Certificates etc.

Students learned how to get a statement of earnings, income tax and USC charged, and a provisional statement of liability to assess whether tax was owed to them or whether they owed taxes. They were also shown how to claim tax credits and allowances and how to split tax bands and credits across different jobs.

In many cases, this review resulted in many students realising they were entitled to a tax refund. Others were just happy to be reassured that everything was in order.

(2) What tax credits and allowances am I entitled to?

Students wished to ensure they were getting all the reliefs they were entitled to. Many were delighted to find they were entitled to tax relief on medical expenses and tuition fees, all unclaimed by them to date. Depending on the sector, some learned of their entitlement to flat rate expenses. Many were entitled to the Covid-19 utilities and broadband relief and, in many cases, these additional reliefs offset any additional tax due arising from their receipt of the PUP.

(3) Do I have to pay tax on the PUP?

With the significant impact of the pandemic on our working lives, it is unsurprising that we saw a focus on the tax treatment of the Pandemic Unemployment Payment (PUP), a payment for workers who have lost their employment due to the pandemic. Some students were surprised to hear that PUP is indeed taxable, but they were happy to hear the tax will be collected over time (up to four years) in the case of payments received in 2020. In contrast, tax arising on PUP received in 2021 is paid on a real-time basis via an adjustment to their tax credits and rate bands. Overall, students were relieved to hear about the tax treatment of the PUP. The Revenue has stated that in most cases, there will be no additional tax liability at the end of 2021.

(4) Do international students have to pay Irish taxes?

Many international students had no idea where to start with the Irish tax system. Getting a PPS number was the starting point in these consultations and they were also given a whistle-stop tour of how the Irish income tax system worked.

Students from overseas were eager to understand when and how to pay tax on their earnings in Ireland. Basic principles were explained to help them determine their tax status, and how remittances from their home country is treated for Irish tax purposes. Some students from European countries were surprised to hear they wouldn’t get a tax allowance here for books or rent, which they would get in their home country.

(5) What’s the story if I’m self-employed?

Some enterprising students needed information on how taxes operate for the self-employed in Ireland. Students who visited the clinic earn income working on their own across a variety of areas, ranging from homecrafts, freelance editing, and activity on social media platforms. In their consultations they learned all about the self-assessment system of tax, along with the various tax deductions/allowances specifically granted in respect of self-employment activities. The Irish VAT system was addressed in these sessions and discussed in the context of their particular type and level of activity.

Many of the queries addressed in consultations were a combination of the above and more. The goal of the clinic was to equip taxpayers with the means to self-assess previous years, file a tax return, ensure all entitlements were claimed and give them the tools to manage their taxes into the future.

All students who completed feedback on their clinic consultations noted that their tax knowledge was improved by the experience. One stated that they had learned “not to be scared of all things tax and accounts. I really didn’t have any idea about what I could claim, how to negotiate ‘my account’ or anything within this realm. I feel a lot more confident now.”