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Income Tax Balancing statement Vs. Tax Credit Cert

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  • 22-10-2020 11:45pm
    #1
    CrabRevolution
    Registered Users Posts: 2,809 ✭✭✭


    Nothing much at stake here,I just hope a more learned soul can help me get to the bottom of it. I'm a PAYE employee, working for the same employer for the last 3 years. In 2019 I was paid €40'000 on the dot.

    My tax credit certs every year have included the employee (€1'650), single person (€1'650) tax credits and also Flat Rate Expenses of €43.80, so total €3'343.80.

    My standard rate cut off for last year was the standard €35'300 plus Flat Rate Expenses of €219, so a total of €35'519. The €43.80 Tax Credit mentioned before is 20% of €219, presumably this is no coincidence.

    So far so good. My payslips in 2019 reflected these numbers. With my income tax being ((35519*0.2)+(4481*0.4))-3343.80. This also what's in the revenue online system.

    When I requested a Balancing Statement for 2019 however, my Tax Credits were simply €3300, my standard rate cut off was just €35300. The €219 has been changed to "Deductions" and taken off my gross pay to give a taxable income of 40000-219 which is €39'781.

    The reduction of my credits and cut off point are largely cancelled out by the reduction in my taxable income but the balancing statements said I'd underpaid by less than a euro.

    This is repeated for every year back to 2017 with the balancing statement giving me a smaller taxable income but also taking more tax out of that.

    Am I missing something or can anyone shed any light on why this is the case?


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    #2
    wally1990
    Registered Users Posts: 1,222 ✭✭✭wally1990


    CrabRevolution wrote: »
    Nothing much at stake here,I just hope a more learned soul can help me get to the bottom of it. I'm a PAYE employee, working for the same employer for the last 3 years. In 2019 I was paid €40'000 on the dot.

    My tax credit certs every year have included the employee (€1'650), single person (€1'650) tax credits and also Flat Rate Expenses of €43.80, so total €3'343.80.

    My standard rate cut off for last year was the standard €35'300 plus Flat Rate Expenses of €219, so a total of €35'519. The €43.80 Tax Credit mentioned before is 20% of €219, presumably this is no coincidence.

    So far so good. My payslips in 2019 reflected these numbers. With my income tax being ((35519*0.2)+(4481*0.4))-3343.80. This also what's in the revenue online system.

    When I requested a Balancing Statement for 2019 however, my Tax Credits were simply €3300, my standard rate cut off was just €35300. The €219 has been changed to "Deductions" and taken off my gross pay to give a taxable income of 40000-219 which is €39'781.

    The reduction of my credits and cut off point are largely cancelled out by the reduction in my taxable income but the balancing statements said I'd underpaid by less than a euro.

    This is repeated for every year back to 2017 with the balancing statement giving me a smaller taxable income but also taking more tax out of that.

    Am I missing something or can anyone shed any light on why this is the case?

    That doesn't seem correct on the balancing statement

    The amount of the flat rate expense is to meant to increase your srcop and move that portion of your income into the 20% bracket and out of the 40%

    20% of the flat rate expense then is used a credit to reduce the net tax amount, so in total you always get 40% of the flat rate expense in tax savings where you having the earnings

    However in summary, there should be absolutely no difference to the logic/method of how the flat rate expense is applied between the tax credit cert/RPN and the balancing statement

    Could you maybe upload a photo of your balancing statement to shed some light and obviously block out all personal info


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    #3
    Geuze
    Registered Users Posts: 13,105 ✭✭✭✭Geuze


    CrabRevolution wrote: »
    When I requested a Balancing Statement for 2019 however, my Tax Credits were simply €3300, my standard rate cut off was just €35300. The €219 has been changed to "Deductions" and taken off my gross pay to give a taxable income of 40000-219 which is €39'781.

    The reduction of my credits and cut off point are largely cancelled out by the reduction in my taxable income but the balancing statements said I'd underpaid by less than a euro.

    This is repeated for every year back to 2017 with the balancing statement giving me a smaller taxable income but also taking more tax out of that.

    Am I missing something or can anyone shed any light on why this is the case?

    No, all ok.

    On the P21, the flat-rate expenses is treated as a deduction from the gross.

    It should also be listed in panel 3 of the P21.


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    #4
    CrabRevolution
    Registered Users Posts: 2,809 ✭✭✭CrabRevolution


    wally1990 wrote: »
    Could you maybe upload a photo of your balancing statement to shed some light and obviously block out all personal info
    On the phone at the moment; I might try edit and upload it tomorrow.
    Geuze wrote: »
    No, all ok.
    On the P21, the flat-rate expenses is treated as a deduction from the gross.
    It should also be listed in panel 3 of the P21.
    So it's treated differently on the P21 to say the P60 (and online successor)? Didn't know that. Is there a reason behind it?


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