PAYE Tax Credit and Jobseekers Benefit

c1aro

Hi Just wondering if anyone can enlighten me (and I apologise for being longwinded)

My question is: if you only receive Jobseekers Benefit for a few weeks are you entitled to a full PAYE Tax Credit.
Here is the background: I was on Jobseekers’ Benefit for the first 10 weeks of 2007 and then went on a FAS course. My husband was in full employment.
My Jobseekers’ Benefit amounted to €1462.30 (after the first €13 of the 10 weeks on Jobseekers Benefit was taken off). I was taxed €292.46 on this amount.

My husband was in full employment and received credits as follows:
Personal Tax credit €3520
PAYE Tax credit €1760
Home carer allowance €770
Service Charges €80

My PAYE Tax credit €292.46

My question is: per the Tax Office’s own leaflet IT24 on taxation on JB it says that “You may transfer your tax credits to your spouse only to the extent that your tax credits exceed the tax due on your Jobseekers Benefit.” This would lead me to believe that the Homecarer’s allowance would have disappeared and in its place I would have been awarded the full tax allowance of €1760. However, having been on to the tax office they say no. They say that my husband can only claim one PAYE tax credit but this doesn’t make sense to me as in 2006 I started the year off working and then went on JB and my full amount of tax due did not come up to the PAYE Tax Credit in that year and yet we were jointly allowed the two amounts for both my husband and I. The wording of the leaflet has me confused – it doesn’t say that you are only entitled to the amount of tax credit that you are due to pay in tax – it clearly says that the unused portion can be transferred.
If I am interpreting this incorrectly – fair enough – but if anyone can explain it I would be grateful.
It would make a huge difference to us in that if I was allowed this it would mean that we overpaid tax.
Hope I explained everything correctly and more than likely I am mis-interpreting. It's the bit about transferring that has been confusing.
Thanks.

dbran

Hi

I believe revenue are correct.

http://www.revenue.ie/en/tax/it/credits/paye-employee-credit.html

The PAYE tax credit cannot be more then the amount of income that is subject to PAYE at the standard rate. So if your only income subject to PAYE is JB and you are only getting JB for a few weeks, the PAYE credit will be restricted to this amount.

Also, if you are jointly assessed, the PAYE tax credit, employment expenses and the basic standard rate band of
£27,400 are non transferable to your husband. see IT2

When they say you can transfer tax credits to your spouse on IT24, I believe they are talking about "other" tax credits such as rent credit, service charge credit etc. It is confusing I know.

Hope this helps

Kind Regards

dbran

c1aro

Thanks dbran

Of course it was too good to be true!

What threw me was the bit about transferring (that's what made me follow it up) and the fact that we got full use of the two tax credits in the previous year even though I didn't use all of mine.

Thanks for the clarification - I hadn't gone at this problem from the taxation side, but from the benefits side and if I had looked up the taxation link that you had sent me in the first place I would have seen where I stood.

Goes to show how many interpretations there are.

Thanks again for taking the time to explain.

C