Back pay

coletteR

Registered User
Messages
7
HI
I was paid 19K euro in back pay this year for 2017; so in 2017 I was paid on an hourly rate but I was awarded a retrospective contract which meant they owed me a lot of holidays etc they payed me this money this year this meant I was taxed 13k !! As I am working full time this year I have paid huge tax where as if the money was paid as it should have been in 2017 i would not have paid so much tax!!
I have contacted the Tax man but they say tough you pay the tax for the year you received the pay. Does anyone know is there any thing I can do to argue this case
 

Leper

Frequent Poster
Messages
1,365
1. Realistically Colette you must suck it up and put up. You received the money in 2020 and you;ll be taxed as per your 2020 earnings.
2. You can appeal the decision, but it will take two years and with the expense of hiring an accountant and a legal tax advisor it would be hardly worth your while.

Sorry!
 

Thirsty

Frequent Poster
Messages
2,807
I think I'd disagree Leper; the point of a retrospective award is to put you back in the position you should have been in the first place.

I'd push back; start with the company who underpaid you, they should have paid you in 2017, you should not be out of pocket even further and the award compensation should take that into account.

A tax agent to review your affairs will cost a lot less than the 13k you've lost in tax and would be money well spent in an overall review if nothing else.

Ultimately, you may or may not succeed; but it's worth some small time investment to appeal in the first place.
 

TTI

Frequent Poster
Messages
290
You could consider to put it into a pension and avoid the tax up to your % salary based on your age.
 

mathepac

Frequent Poster
Messages
7,277
That being the case there is still the opportunity to have the 2017 earnings taxed as 2017 income, thereby perhaps reducing the overall tax bill. You'll need to act immediately as the 4-year window is closing fast. Ask a tax-agent the question and get a letter from your employer specifying the amount of retrospection applicable to 2017.

Best of luck.
 

coletteR

Registered User
Messages
7
Hi thanks all I think I will talk to a tax advisor as revenue cannot give me a straight answer....
 

misemoi

Frequent Poster
Messages
205
Also speak to your payroll contact & the budget holder of your cost centre...the company might be in a position to reclaim some of their overpaid employer PRSI. Might not be a lot to them, but if there is anyone else in the same position as you it might be worth it for them.
 
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