Revenue have reduced 2017 credits after 2016 Form 12 return...

[rob oyle]

Hi,

I've sent an enquiry to Revenue already on this but pending their response...

I did my Form 12 for 2016 a few weeks ago. This past week, I got my assessment back.
For some reason, dividend income (Irish and UK companies) I've received have been deducted from my 2017 tax credits, rather than taxed in 2016. I assume this is because it's easier for Revenue to reclaim the income tax liability this year than request payment for tax due last year.

However, I would only pay tax at the low rate in 2016 (and little or no USC), whereas it'll be a fully-loaded income tax liability in 2017. Has anyone come across this issue before? I presume I can get Revenue to include it in my 2016 ultimately?

 

[Black Sheep]

Perhaps they are assuming that you will have the same dividends in 2017, therefore no need to complete form 12 in 2017 assuming all other income tax is deducted at source.

 

[torblednam]

I think you're misunderstanding what's happening here.

Your balancing statement for 2016 will include those items and should show a liability due of €X, based on those items being taxed at the appropriate rate.

The adjustment to your tax credits in 2017 is simply the means of collecting that amount of money. A tax credit is exactly that, a credit for that amount of tax. Reducing a tax credit has no effect on how much tax you owe at any particular rate; it doesn't mean that you're BEING taxed on that income in 2017, you're simply PAYING that much extra in tax in 2017.

 

[Nordkapp]

yeah, had a classic myself with my statement this week, apparently had an under payment in 2014 which they did not reduce with the overpayment in 2015 and added it to an under payment in 2016. Nicely adding up so I need to reduce my liability for 2017. Dividends again creating the liability, shocking to have to pay tax at 40% and the USC. Hardly worth maximising wealth in this country.