claiming tax relief - low income worker

M

maura

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How can you claim tax relief on an avc not deducted at source and medical expenses if you are a low income worker and with tax credits (single parent tax credit) already pay only a tiny amount of tax(good complaint). Surely you’d have to pay more tax than you can claim back? If this is true then super low income workers can’t avail of the tax advantages of avcs for example. Am I correct or not with this? I wouldn’t mind being wrong with this.
 
Interesting question. I'd say you won't be able to pay leas than zero tax.
Your income tax calculation is based on income after pension contributions (and after prsi/USC deduction)
Hence it isn't included in the income tax calculation in the first place.
So it isn't a question of "getting tax back" but of "not paying tax it in the first place"

Given that low income workers don't pay much tax, it doesn't change much

I don't think it is unfair to be honest. Any other pension benefits still apply eventually.

Mind, any tax benefits are also based on % if income, so if you earn 20K and are say 30 year old, 20% ie €4000 contributions would be allowed.
20% tax on €4000 means a theoretical reduction of your income tax by €800.
 
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You are not wrong I'm afraid, you have to pay tax to claim it back. Definitely for medical expenses and while I'm not expert on pensions I imagine the same applies, it's a refund of tax in theory or a credit off it but if you don't pay it then nothing to get back.
 
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