On incorrect tax band - Week 1 basis after Covid payment?

[irishstig]

Hello All, I am paid on a commission only basis following a sale. I may not get any pay for a month and may have a windfall of a payday the next week. I was on the Covid-19 payment for a number of months and am now back to work for a number of weeks. My employer recently made a payment to me through RPN. Through the automated software the income tax deducted was at the rate of 40% which appears incorrect. When the payment was made through RPN by my employer the rate was not down as emergency tax. I raise the query with Revenue through My Revenue and below in italics is the response I received;

"Your credits and rate band are now allocated as requested to your current employment .You are on a week 1 basis as you were in receipt of the Covid PUP payment.
If you are put on the Cumulative basis, you might pay less tax – or even get a refund however, as the Wage subsidy and PUP are both taxable, it’s money that you may end up owing when the year is over.
On that basis, it is highly advisable to remain on a Week One basis for the remainder of 2020 to minimise the amount you would owe."

I am actually having difficulty fully interpreting their response. Could somebody kindly advise me if the problem has being rectified on the basis of the first line of their response? If not what action should I now take to rectify? Many thanks in advance for all constructive input.

 

[Nutso]

You should remain on Week 1 until the end of 2020; then you can request a P21 balancing statement and you will receive a refund of any tax overpaid (once the taxable PUP/Wage subsidy are taken into account). On Week 1 you will pay higher taxes for now but it will be better than owing tax at the end of the year (in my opinion).

 

[irishstig]

Thanks for your reply Nutso, much appreciated.
I take it that Week 1 basis was a Revenue instruction? Presumably it should be quite straightforward applying for a tax refund at my local Revenue public office after year end?
Would I expect to automatically return to cumulative basis from the start of 2021 or is the any action I would need to take in this regard?

 

[Sue Ellen]

Presumably it should be quite straightforward applying for a tax refund at my local Revenue public office after year end?

These days it makes much more sense to sign up with www.mygovid.ie and get a full verified account which provides access to many Government services.

With Covid19 expected to stay with us in 2021 the less of us who attend public offices the better.

 

[New2This]

I doubt they will adjust you at the start of 2021 however if you go to revenue.ie and you sign up to my account.

You can do a lot online including, reporting additional income, claiming medical expenses, claiming the staycation rebate*, asking for a balancing statement and instructing revenue to pay any refund due to your bank account.

Apparently you can also adjust your band allocation etc but I have never done this so can't confirm.

*not sure the staycation rebate is there yet but revenue have advised that it will be available for 2021

 

[Nutso]

Thanks for your reply Nutso, much appreciated.
I take it that Week 1 basis was a Revenue instruction? Presumably it should be quite straightforward applying for a tax refund at my local Revenue public office after year end?
Would I expect to automatically return to cumulative basis from the start of 2021 or is the any action I would need to take in this regard?

Yes, the easiest way to do this now is to sign up online for "MyAccount" at Revenue. You can see all your tax credit certificates provided to your employer here as well as a list of your pay dates/amounts and the document that replaces the annual P60.

https://www.ros.ie/myaccount-web/sign_in.html?execution=e1s1

Once you have your P60 you can request your P21 balancing statement and refund. As New2This has recommended you can also enter any medical expenses/staycation expenses from October and these will also be factored into your refund.