[Article] Workers failing to cash in on huge tax windfalls

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Workers failing to cash in on huge tax windfalls
From:The Irish Independent
Monday, 8th December, 2003
Allison Bray

MANY taxpayers are short-changing themselves by not claiming tax credits they are entitled to receive, Department of Finance statistics have revealed.

And the lax approach to claiming entitlements is estimated to be saving the exchequer hundreds of millions of euro in tax breaks each year.

According to the Department of Finance, only 60pc of tenants claim the tax credit for rent, while just a fraction of taxpayers claim their entitlements for medical expenses.

Only half of unionised workers claim tax breaks for union membership and a paltry 3pc of householders claim their entitlements for local authority bin charges.

The astonishing revelations are contained in projected tax receipts for 2004 published in Department of Finance statistics accompanying last week's budget.

The Department of Finance expects medical expense tax relief will cost it €54m this year, with only 107,800 people claiming tax relief.

That's despite the fact that all non-medical card holders are entitled to write off the cost of prescription drugs and most other medical costs - with some exceptions - if their expenses exceed €127 a year.

In recent years, the tax credit cost the Department of Finance €41.1m for 2000-2001 and €38.4m in 1999-2000.

James Reilly, vice president of the Irish Medical Organisation, said it appeared that most taxpayers simply do not know that the tax breaks exist.

"Clearly people are not aware of this tax credit and are not claiming it," he said.

Forty per cent of rent-paying tenants are also not availing of tax relief entitled to them, according to the Government's statistics.

The Revenue Commissioners are predicting that only 84,600 will claim rent tax relief - despite the fact that there are more than 141,000 people living in private rental accommodation, according to the most recent census data.

The tax break - which ranges from €254 to €1,106 per year per claimant, depending on their circumstances - cost the exchequer €28m in 2000-2001 and €31.3m in 1999-2000.

The figures also reveal that only half of union workers claim tax relief for their union memberships, with just 258,000 of more than 500,000 union workers belonging to the ICTU making the claim for the €200 tax credit, which - because it is applied at the basic tax rate - translates into a €40 annual tax saving.

And, despite the public outcry over bin charges, only 44,100 householders have claimed the tax credit for local authority waste charges - 3pc of the 2.1 million potential claimants.

Revenue Commissioners spokesman Dave Coleman said the Government was not trying to discourage people from claiming tax relief and he urged them to closely scrutinise their tax entitlements.

"Of course people should check what they're entitled to and contact the Revenue Commissioners if in any doubt. We're anxious that people are checking to make sure of their entitlements," he told the Irish Independent last night.