420,000 workers to receive tax bills for Covid payments
Around 420,000 people will be issued tax bills today as a result of payments they received under the two main Covid subsidy schemes last year.
71% of those in receipt of the Temporary Wage Subsidy Scheme and 33% of those on the Pandemic Unemployment Payment underpaid tax – and will receive a bill.
Data released by Revenue yesterday shows that 80% of taxpayers’ statements are balanced, overpaid or underpaid by less than €200, while 706,000 taxpayers are due a refund.
In total, over 600,000 people underpaid income tax or universal social charge in 2020.
This is partly due to the fact that the TWSS and PUP payments were not taxed at source.
The amount outstanding is €458 million.
Revenue has confirmed that this tax liability will not be due this year.
Although the option is available for taxpayers to fully or partially pay any liability through their online account with Revenue, people are not expected to make a lump sum payment.
Instead, Revenue will collect the full or any remaining liability, interest free, by reducing tax credits over four years, starting in January 2022.
“Given that Revenue has confirmed that it will collect any tax owing, interest free, over a 4-year period, this equates to a collection of €1 extra in tax per week for those with an underpayment of €200,” said Declan Rigney, Head of Revenue’s Personal Division.
From today all PAYE taxpayers will have access to their Preliminary End of Year Statement, which will be available through MyAccount on the Revenue website.
“This will bring a level of visibility, assurance and certainty to those who were concerned about their end of year position,” said Mr Rigney.