Indo - "Revenue is chasing tens of thousands of pensioners over owed tax"

S class said:
There would be all out "grey brigade" war if pensioners who collect their weekly 289.30 at their local post office had their cash payout reduced by up to 40% +.
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Even if the Department of Social Protection magically became the Department of Social Protection and Income Tax Deduction for Lazy Pensioners, many of those pensioners would still have to file an annual tax return!
 
I keep going back to the fact that Revenue have said that they'll adjust the tax credits / rate bands of PAYE-only pensioners, so that they're taxed correctly from their occupational pension - this is the specific circumstance of the outraged lady in the indo article.

So if she's typical of the 68k letter recipients, I'm none the wiser as to what the breakdown was that meant their credits weren't amended... there is an answer, it just hasn't emerged yet. If it was in any way Revenue's fault it's a major, major PR own goal from them. I look forward to getting more details at some stage!
 
torblednam said:
I keep going back to the fact that Revenue have said that they'll adjust the tax credits / rate bands of PAYE-only pensioners, so that they're taxed correctly from their occupational pension
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Me too, but until, perhaps - as you say, someone in receipt of such a letter posts here and gives specific details of the letter and the wider circumstances, there's an awful lot of guesswork and speculation involved.
 
torblednam said:
I'm none the wiser as to what the breakdown was that meant their credits weren't amended... there is an answer, it just hasn't emerged yet.
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It's very simple and has nothing to do with tax credits; it's simply that the people written to haven't yet filed an Income Tax return for 2022 so they are being reminded to do so. It's not Revenue's role to guess taxpayers' income from all sources - that's a matter for each taxpayer to do.

As Charlie's article explained: the Revenue letter outlines the steps which taxpayers should take to review their preliminary end-of-year statement and file an income tax return.

What I'll be interested in finding out is whether these recalcitrant dual-pensioners will have to pay the normal late filing penalties, although I expect that a benevolent Revenue will turn a blind eye to that that one!
 
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If what Revenue say on their own website about automatic reporting from DSP to them of most SW pensions and concomitant reduction of the taxpayer's credits to account for this is correct, then an explicit tax return is arguably moot as the deductions should be correct (bar USC maybe?)?
 
And yet Revenue say the complete opposite...

Indo - "Revenue is chasing tens of thousands of pensioners over owed tax"

https://m.independent.ie/business/money/revenue-is-chasing-tens-of-thousands-of-pensioners-over-owed-tax/a673258340.html The Revenue Commissioners have written to thousands of pensioners to warn of incorrect tax payments. Many people owe money to the tax authority because they have an...
www.askaboutmoney.com

Indo - "Revenue is chasing tens of thousands of pensioners over owed tax"

I know they aren't doing a return but my point is that revenue have the data. Or at least I think they have. So the employer (pension scheme) operates paye and revenue also know that they have a state pension. So it’s more likely than not that tax is due. I don’t think it’s a big deal to get...
www.askaboutmoney.com
 
Marsupial said:
No they don't! Like an earlier poster you're not reading what Revenue wrote!
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How is this:

Taxation of Department of Social Protection pensions

This page outlines how pension payments from the Department of Social Protection are taxed
www.revenue.ie
Social welfare pensions paid by the DSP are liable to Income Tax. They are not liable to Universal Social Charge (USC) or PRSI. The DSP gives Revenue information on the taxable amount of these pensions.
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If you are a PAYE taxpayer​

We reduce the annual tax credits and rate band on your Tax Credit Certificate (TCC) to take account of the pension.
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not the opposite of this?

Social welfare payments

Information on what to do if you are receiving social welfare payments.
www.revenue.ie

Social welfare payments​

You should tell Revenue if you have received any payments from the Department of Social Protection (DSP) during the year.
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@ClubMan

I think it is because state pensions are taxable but they are a subset of all social welfare payments which include some non-taxable payments. Both DSP and Revenue are engaged in backside-covering here. Their messaging is strictly correct but not at all clear to the citizen.

I think a previous poster hit the nail on the head when he or she said there would be political carnage if DSP ever started to deduct tax thereby reducing weekly cash payments at the post office. Weekly cash payments of this nature are mainly a support to postmasters and adjacent retail which is also a factor.

The logical thing - DSP deducting tax like any employer or ARF provider - does not happen here.
 
Most people who have Occupational Pension income will give their Tax Credits to the Occupational scheme. They deduct any tax at source. So the individual is fully tax compliant on that income.
But if the individual also has other income - SW Pension, interest, dividends, rental income etc - that's why they need to file a tax return (and if they are claiming tax relief for medical expenses).
The Dept of Social Protection don't have a tax deduction facility. They would not know the individuals tax position, whether to deduct tax at 20% or 40% . Imagine the uproar if they deducted tax on an "emergency basis"?
My understanding is that Revenue are now adjusting tax credits for individuals they know have both Occupational and SW Pension income. But I think that has only been introduced this year- thus the letter for 2022 tax year.
It's not as if the requirement to file a tax return.is a recent innovation.
 
Conan said:
It's not as if the requirement to file a tax return.is a recent innovation.
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I would hazard a guess that a large proportion of people never have filed one, as their employer took care of their PAYE tax, they don't have an investment property and fail to claim medical expenses etc. Suddenly they retire and are suppose to know they need to start completing one.
 
@Conan

I do know they don't have the capability of deducting tax from state pension etc, but if they were to start reducing the payment by 40% ,and saying, if you think that's wrong, please fill in the self assessment tax return, they'd quickly be inundated with them!
 

Agree on the ass covering.

Revenue making a general statement ("all DSP payments must be reported") reflects the general principle that all income received should be taxable and reportable. However, they explicitly go on to categorise those payments into those "Taxable DSP payments you need to declare" (with associated instructions on how to declare) and "Taxable payments you do not need to declare" (with zero other commentary regarding filing anything).

Further, they go to clarify the reason you do not need to declare and it is "...for Income Tax purposes".

Perhaps I'm not reading what Revenue wrote. What did DSP write?

 
I think Revenue are after people who have multiple incomes from pensions, DSP + private ones and who have not made a tax return.
The tax return should declare all the incomes , but Revenue say these people are not doing that and so are likely under paying tax.

"Many people owe money to the tax authority because they have an occupational pension in addition to their state pension."

Many former PAYE employees may not have filed a return in years and probably didn't expect to in retirement.
 
Not what Revenue state on their own website re. automatic reporting of most SW payments by DSP to Revenue and concomitant reduction of tax credits, or my own experience in the past with SW payments such as Jobseeker's Benefit and Illness Benefit where everything happened automatically.
 
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