Incentivised career break taxation

Carley353

Hi, does anyone know if Top Slicing Relief applies to a lump sum payment made for an incentivised career break?
thanks

nompere

Top slicing relief only applies to payments made on retirement or redundancy:

http://www.revenue.ie/en/tax/it/reliefs/lump-sum-payments.html

There is another scheme for lump sums paid during an employment. This charges one third of the lump sum to tax at the individual's top rate.

http://www.revenue.ie/en/tax/it/reliefs/lumpsum_payments_employees.html

This may well give even higher relief, though it's not entirely clear that the sort of payment you describe will actually fall within that relief. You need to check with either Revenue or the company's own advisers.

Carley353

I was given the wrong info by Revenue then cos they told me to send in a P50 form when I went on career break and then to apply for top slicing relief at the end of the tax year. I did tell her it was an incentivised career break though - I never mentioned redundancy.
Will Revenue claw back the refund then when I go back to work or should I highlight it to them?

Shane732

Sorry, but an incentivised career break?

Are you terminating your employment?

Carley353

No I'm not terminating employment, simply taking a temporary career break.

Mr. Incognito

Where this form is not completed in full, it may be necessary to return it to you which will delay processing
your claim.
Am I entitled to an Income Tax and/or Universal Social Charge (USC) refund?
If Income Tax and/or USC has been deducted from your pay since 1 January and you are now
unemployed you may be entitled to a refund.
When do I apply for a refund?
You should wait a minimum of four weeks from the date you became unemployed before you apply.
If you are in receipt of any taxable sources of income (which includes taxable income from the
Department of Social Protection) you should wait a minimum of eight weeks. If you were taxed on
Emergency basis you may apply immediately for a refund on becoming unemployed.
How much Income Tax and/or USC is refunded?
If you are entitled to claim a refund, the amount will depend on:
• the length of time you have been unemployed
• the amount of Income Tax and/or USC you have paid
• whether you have arrears of Income Tax and/or USC.
How do I apply?
Complete the form overleaf and send it to your local Revenue office together with:
• Form P45 (Parts 2 & 3) given to you by your last employer,
and
• where applicable, supporting documentation in respect of Income Tax and/or USC deducted
from any casual earnings or any other source of income, returned overleaf.
What happens next?
Your Revenue office will send you details of the refund (if any).
Certain amounts payable to you from the Department of Social Protection may not be liable, in full, to
income tax. In calculating your repayment, Revenue will exclude any amounts which are not taxable.
Payments from the Department of Social Protection are not chargeable to USC.
Further Information

Did you read the information on the Form??

A requirement is a p45 to be returned with it.

If you are on a career break you are not unemployed.

Common sense should surely tell you that.

Revenue persons answering the phone are generally untrained 1st year clerical officers that know less than you

2ndcoming

Mr. Incognito wrote: »

Revenue persons answering the phone are generally untrained 1st year clerical officers that know less than you

Given the recruitment embargo no new Clerical Officers have been taken on since 2008 and none are untrained, all have to complete a 6 stage customer service and taxation course as well as 6 months on the job training.

Unfortunately that cannot guarantee the quality of a response or the ability of the officer who answers the call, but the majority of the time you should get the correct advice / information.

Mr. Incognito

2ndcoming wrote: »

Given the recruitment embargo no new Clerical Officers have been taken on since 2008 and none are untrained, all have to complete a 6 stage customer service and taxation course as well as 6 months on the job training.

Unfortunately that cannot guarantee the quality of a response or the ability of the officer who answers the call, but the majority of the time you should get the correct advice / information.

I'm glad to hear that they have some new basic training but outside of a few decent specialist areas I have found the general knowledge of CO's of tax affairs to be very poor.

I'm sure they will improve in time further- they have come on leaps and bounds in the last ten years.