Restricted Tax Credits

Charisteas

Apologies for yet another Tax Credits thread, hopefully this one will be short and sweet.

Asking on behalf of a friend who's taxes I looked at, I told her she was entitled to claim rent relief as she has been PAYE and renting since early 2009, so she applied for 2009, 2010, and 2011.

A week later she got three documents through the post;

2011 amended tax credit certificate;
2010 amended P21
2009 amended P21

The 2011 certificate added 320.00 rent tax credit to the tax credits, no problems so far.

But on the 2010 and 2009 P21's, they haven't added the Rent Tax Credit to the document, and under the combined total of the 'Panel 4 Tax Credits' box, it says "Tax Credits are Restricted to Tax Due".

At first I thought this meant that she owes tax, but then I figured they would have just deducted any outstanding amount in this years tax.

Any idea what this "Tax Credits are Restricted to Tax Due" actually means?

Mr. Incognito

You need to have paid enough PAYE to get the credit.

Tax credits are set against PAYE paid so she probably does not have enough PAYE paid to get relief.

Charisteas

Thanks for clearing that up.

The income wasn't a lot;

In 2009 the taxable income was 3657,00 (tax at 20% = 731.40)

In 2010 it was 14307.00 (tax = 2861.40)

The 731.40 and 2861.40 were both refunded both years as they fell below the tax credit threshold of 3660.00 (1830 for personal tax credit and 1830 for paye tax credit).

I thought anyone on the PAYE register could apply for the rent relief, but I suppose theoretically no tax was paid for these two years so she can't claim back what she didn't pay.

dearg lady

i thought they abolshed the rent tax credit for 2011, no?

Charisteas

dearg lady wrote: »

i thought they abolshed the rent tax credit for 2011, no?

They have abolished it for new renters - if a person began renting after 7th December 2010, they can't claim back any tax.

As for existing renters - they are phasing it out year by year, with 2017 being the last year that they will pay out.





I'm not sure if the married payout is per person, or per couple?

If it per married person, then without getting into the subject of people should only get married for love, I could envisage a lot of renting couples getting married just so that they can claim twice the pay-out.

Mr. Incognito

Charisteas wrote: »

They have abolished it for new renters - if a person began renting after 7th December 2010, they can't claim back any tax.

As for existing renters - they are phasing it out year by year, with 2017 being the last year that they will pay out.





I'm not sure if the married payout is per person, or per couple?

If it per married person, then without getting into the subject of people should only get married for love, I could envisage a lot of renting couples getting married just so that they can claim twice the pay-out.

I think you don't understand the basics here.

It's a CREDIT, not a PAYMENT. As such the amount above are the salary that is relieved. So take your married person. He gets 4K relieved at the standard rate so the credit is worth 4,000 x 20% so 800 euro Max. A single person will get 400 Euro max. I can't see a lot of people getting married for the sake of 400 euro.