PAYE Taxback Query - Underestimate??

brandon_flowers

All,

Hoping someone can help here, my girlfriend has left Ireland this year to live with me abroad.

Her P45 is dated June 7th. She didn't receive any social welfare payments before leaving the country. We have applied to the Revenue for a refund and the amount the said she is entitled to is considerably less than expected. Because she is non-resident for this year (less than 181 days) I expected she would receive a full PAYE refund which is approx €10K. However revenue say she is only entitled to €5.6K.

There is no other year being offset against this amount of €5.6K.

Can anyone advise if she is entitled to the full PAYE refund?

Bold Abdu

Unlikely.

What was her gross and how much tax did she pay per P45?

How long was she resident in Ireland before leaving?

dohallor

Actually you are resident for tax purposes for a year if:

• You spend 183 days or more in Ireland in that year from 1 January – 31 December

or

• If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year. For example, if you spend 140 days here in Year 1 and 150 days here in Year 2, you will be resident in Ireland for Year 2.

Therefore although your girlfriend spent 181 days in ireland in 2013 she spent (presumably) more than 100 days resident in 2012 making her resident for 2013 based on the 280 days rule. She is entitled to tax credits and cut-off point for the remainder of the tax year but not a full refund.

allthedoyles

If she paid 10k in 6 months , it is unlikely with such high earnings that she is going to be entitled to full refund regardless .

brandon_flowers

OK thanks for the help uys, answers to some questions.

Her earnings were 5166 per month gross for 5 months, 2100 for June 7th and a bonus of 10000 in March.

I think the bonus payment is screwing up the amount because €4100 PAYE was charged on this payment which is an overpayment because no tax credits and no 20% rate is included. Everything was deducted at 41%.

She has lived in Ireland all her life bar a while in Australia 7/8 years ago. In any case if she applied for the refund in 2014 having spent all of 2014 and more than half of 2013 out of Ireland would she be considered non resident for 2013?

Alan Shore

I think you are getting the nature of the relief confused. You appear to think that as she left in July she is non resident for the whole of 2013 which is wrong.

Split year relief provides that where the individual leaves the country during the year and is not resident in the country in the following year then they are deemed to be non resident from the date of departure.

So they get a full years tax credits and standard rate cut off even thought they only have 1/2 a years income. This is what gives rise to a refund.

Bold Abdu

So she earned €37,930. This is taxed €32,800 *20% plus €5,130 *41%=€8,663 less credits of €3,300=€5,363 liability for the year.

If she paid €10k paye then she is due back the difference of €4,637. There might also be some USC due back.

That's basically how it's calculated.

brandon_flowers

Thanks very much for the help guys, my impression was definitely skewed by the fact that I did it a few years ago and got almost all my PAYE back for the first 4 months of 2010. Must have had enough of tax credits to cover most of it.

Anyway she'll be €5.6K better off than she is now so it is not that bad.