Underpayment on p21

I applied for med 1 expenses of 414 euro and just got a p21 off revenue saying that there is an underpayment of €1,570.74. Im a primary teacher and all my tax is sorted by department and i have my husband s tax credits as he was only working part time last year and was on jobseekers. Any ideas how I can owe them this much money? thanks in advance.

Did your husband receive jobseekers benefit?
This is taxable - but jobseekers allowance is not.

This could be the reason for your underpayment.

Does your P21c include a PAYE tax credit for each of you?

That would roughly equate to the difference:

Underpayment of €1,571 MINUS PAYE credit of €1,650 is a refund of €79

Med exps of 414 x 20% = refund of €83 which is not too far off the €79 above

Hi thanks for replies. My husband is on jobseekers benefit.
it just seems to have PAYE tax credits for me. The spouse side is blank. God its so confusing.It says for me Personal Tax credit 3,300.00, PAYE TAx credit 1,650 and health expenses 82.80?

Well called DB74.

Lucy09, they should have allocated a PAYE tax credit for your husband too. Give them a call and tell them that.

ok thanks is this still the case if I have taken my husbands tax credits?

lucy09 said:

ok thanks is this still the case if I have taken my husbands tax credits?

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PAYE credit isn't transferable

Generally everybody is entitled to a single tax credit (€1,650) and a PAYE tax credit (another €1,650)

Certain people (self-employed and company directors for example) are not entitled to the PAYE tax credit but I presume that this is not applicable in your case so you can ignore this.

For a husband and wife, the single credit of €1,650 can be transferred between spouses but the PAYE tax credit cannot be transferred so that person would have to earn enough (€8,250) to utilise that credit or it is lost

In your example you state that your husband worked part-time and also earned jobseekers - the PAYE credit can be used against both these forms of income so you need to contact the tax office and tell them that they should amend the P21C to take account of the fact that your husband was entitled to the PAYE credit for 2012

They should then issue an amended P21C with your refund of approx €80

thanks for the advice. My husband would have earned 11,561 last year. So will ring them tomorrow. This happened me a few years ago aswell when I tried to claim back medical expenses I had a underpayment aswell , must look into that.

DB74, You were right. Rang the revenue and they had forgotten my spouses PAYE tax credits. Turns out they now owe me €150. Thanks so much for all the advice.

I have the same problem , I received today P21 and I have an underpayment for the year 2012 of 550. I am absolutely sick over it . In 2012 my husband worked for the department of education for 8 months and received social welfare for the rest of the year. Myself I worked for the entire year with county Dublin vec. I am so stressed over it as I thought does two employers know how to work the taxes. I read the above posts and I saw that a refund was given after all. Would I be in the same situation? Any help would be really appreciate it .Thank you.

Unlikely I'm afraid. The two employers do know how to work out the tax, the problem is probably the social welfare, assuming it was jobseekers benefit this is taxable and would not have been taxed automatically.

The previous poster was in the position that they had only been given one PAYE allowance, I think this is unlikely in your case as your husband was working for 8 months and probably had the PAYE allowance then. What tax credits did they allow you on the P21?

wbbs said:

Unlikely I'm afraid. The two employers do know how to work out the tax, the problem is probably the social welfare, assuming it was jobseekers benefit this is taxable and would not have been taxed automatically.

The previous poster was in the position that they had only been given one PAYE allowance, I think this is unlikely in your case as your husband was working for 8 months and probably had the PAYE allowance then. What tax credits did they allow you on the P21?

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Thank you for the replay.
Tax credits for myself ( Personal tax credits 3300, PAYE tax credit 1650, Rent tax credit 480) Spouse( PaYE 1650)
I really hope this is a mistake as it is very frustrating!

You have all your allowances unlike the other poster, did you have any medical expenses or anything to claim? Have you double checked their figures against your p60s etc just to sure.

Give them a ring to confirm it is correct and if it is they can reduce your credits for the rest of this year so that you pay it back gradually if paying a lump sum would be difficult for you.

Taxproblem, Did you ask revenue for an IT1 form , The reason I am asking is maybe you could take some of your husbands tax band if you are the main earner, I was given the tax band my wife was not using and instead of owing revenue money I received a rebate dating back four years, It might be worth a phone call and mentioning it to them , They were very helpful to me .

Hi,

Hopefully this thread isnt too old to extend....

I typically submit a Form12 to claim tax refunds (due to AVCs, Med1 etc). Anyhow received my 2013 P21, and though while we have over paid our taxes, the refund is less than expected. In fairness the P21 looks correct, but as we are both PAYE workers if I do the P21 without any of the revenue unknowns, it shows a tax underpayment in the region of €1600. Just trying to understand how this could be assuming the P60 info is correct? The claimed credits seem OK (as in previous years).

Anybody have an ideas how this could happen? I could go digging out the december payslips to help verify the P60 info...

Any insights would be appreciated..

Thanks

S

No Explanation but strangely one taxable income has increased from the previous year but the tax paid decreased by comparison. This looks like the reason for the under payment. It was suggested tax credits and cut off points had increased but the P21 doesn't back this up.

Revenue had all the P60 info online, I guess the employer supplies this data, so is it the employer responsibly to correctly calculate the figures for the P60?

Thanks
S

Hi Suzie

It's difficult to offer an explanation without knowing some of the figures involved and when you start introducing AVCs and Medical exps it becomes even more difficult

You should check your P60s and see what the Tax Cut-Offs and Tax Credits you received for the year are. The basic tax credits for a married couple who are PAYE employees should be €6,600 (€1,650 personal credit each PLUS €1,650 PAYE credit each) while the basic cut-off should be €32,800 each. There may be some differences to account for flat-rate expenses or stuff like that and some credits & cut-offs can be transferred but they should be roughly the total figures anyway.

If the cumulative tax credits and/or cut-offs are significantly different to those ones then that's what needs to be investigated first to determine why they are different.

A tax underpayment of ~ €1,600 is very similar to a tax credit of €1,650 so my gut instinct is that somewhere along the line one of the tax credits got duplicated and both spouses were receiving the same one instead of it being allocated to just one spouse.

Hi

without going into figures, I put aside all the med expenses, avc etc and just processed the P21 with the P60 info and the credits info. For example the Tax Cut-Offs and Tax Credits in 2012 & 2013 were the same. It just seems we didnt pay enough tax up front. I need to review the payslips...

keep you posted, thanks

S.

Hi all,

I have a theory/explanation, see what you think...

From my perspective these form12 submissions are pretty much repetitive each year, though in 2012 it wasnt straight forward. My partner is in the public service and is also contributing to a PRSA AVC. While processing F12 for 2012, Revenue interpreted PRD as personal contributions out of one's age related percentage (see here http://www.askaboutmoney.com/showthread.php?t=183706). Therefore Revenue carried forward the surplus into 2013 as credits. A new Tax Cert was issued, and in Oct 2013, my partner consequently got some tax refunds. This interpretation was incorrect and Revenue subsequently amended the 2012 P21.

I havent delved into the figures much but they appear to be in the same region.

At least it provides an explanation, but there is no explanation from my partner of where that money is now ;-)....Its long gone at this stage!!

Thanks

S.