Tax on Jobseekers Benefit?

Peadar_85

Hi,

I have a question on the P21 Balancing Statement that I just received for the year which someone here may have expertise on. Basically I was made redundant during 2010 but got a new job within 1 month so I received 4 weeks Jobseekers Benefit.

All my tax affairs were sorted out in a timely manner - new employers got my P45 & Revenue were informed of my new employers details all in the first week. When I receive my P21 statement, I am informed that I've made an underpayment of circa. €300. It looks as if both my 2010 employers handled my PAYE tax correctly but Revenue are including Jobseekers Benefit as part of my income for the year hence are calculating a bigger tax bill than I've actually paid.

Maybe this is a silly assumption to make but I would have thought the Jobseekers Benefit would be exempt from this calculation? Would anybody have a definitive line on this?

Thanks

namenotavailablE

A portion of Jobseeker's Benefit is taxable-child related portion and the first €13 per week is exempt.

You can get more details from this document:
http://www.revenue.ie/en/tax/it/leaflets/it24.pdf

allthedoyles

Ask SW for a Statement of Earnings for 2010 , and then compare this with the Revenue figures on P21.

Also browse the Revenue website to see if you can increase your tax credits by claiming more allowances , like rent , wheelie bins, job related expenses , medical expenses , union dues , etc etc

Peadar_85

Thanks guys.

I'm pretty sure they have my SW income correct and I've rent and Service Charges already claimed - not in a union and had no medical expenses during the year so think I've already got my maximum credits.

I've read the document at the link above and see alright that Jobseeker's Benefit is indeed taxable so that answers that question. I notice though that it also states that "Your Tax Credit Certificate and standard rate band will be reduced by the amount of your taxable Jobseekers Benefit. Both yourself and your employer will be notified of your reduced tax credits and standard rate cut-off point."

As I mentioned Revenue were informed of my new circumstances promptly and within a fortnight they had issued a cumulative tax credit certificate to my new employers so I'd have expected my tax affairs for the year to have been in order. I can only assume that this cumulative tax credit certificate did not include Jobseekers Benefit income thus my new employers calculated my taxes based on the information at hand.