Revenue retracting refund

M

MRSBAN

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Hi just looking for some guidance

My husbands HR sent an email advising their staff to claim income continuance for their health insurance
My husband lodged the claim and 2 days later in june revenue lodge the refund to our account.
Yesterday we received notice that it was an error and we are not entitled to the claim and they are looking for 2500euro in the next 30 days
We have tried to engage with the agent that was dealing with my husband but she is not replying to his emails
We are not in a position to pay the sum of money back in this time frame
How can they issue a refund if you are not entitled to it?
 

It's a self assessed system. It's presumed that you understand your entitlement to credits/reliefs when you file a tax return claiming them. Each credit/relief has a short explanation of what it is and further information if needed in the tax return. If I was your spouse I would be contacting his HR department to see why that advice was issued and telling them the hardship you are encountering due to the advice they issued. Income Continuance is not related to Health insurance. Those are two separate reliefs.

Permanent Health Benefit contributions

You might take part in a scheme to have your income continue if you are absent due to illness or injury
www.revenue.ie
 
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MRSBAN said:
How can they issue a refund if you are not entitled to it?
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Revenue did this to us in August, they refunded because someone in revenue were looking at my husband’s returns and due to HAP prepayment of income tax, revenue decided he was due a refund. Technically we could have kept the money and revenue would not have realised their mistake, but my accountant after a bit of fuss has organised that revenue take the money back.

You need to call contact revenue to arrange to repay this money in a manner that you can afford, such as a monthly standing order.
 

Your case differs fundamentally from the OP’s though Bronte, insofar as they made an incorrect claim (self assessed) which Revenue have subsequently found not to be correct.

The OP’s problem is of their own doing (thanks to a bum steer from hubby’s employer), while yours is Revenue’s doing.
 
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Bronte said:
You need to call contact revenue to arrange to repay this money in a manner that you can afford, such as a monthly standing order.
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Were you able to organise a standing order? They want us to take out a loan. Under normal circumstances we would have spent the refund but we had literally just bought and moved into our first home.
 
MRSBAN said:
Were you able to organise a standing order? They want us to take out a loan. Under normal circumstances we would have spent the refund but we had literally just bought and moved into our first home.
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From the Compliance Code for PAYE Taxpayers, section 12

Occasionally, a taxpayer may not have the financial resources at his or her disposal to make a single payment in settlement of the outstanding liability identified following a PAYE compliance intervention. In these circumstances, Revenue may agree to payment of the outstanding amount over a short period of time, usually by way of monthly payments or by reduction of future
tax credits. Where a phased payment or reduction of future tax credits is agreed, interest is chargeable until the outstanding balance is paid in full.

If a taxpayer finds that he or she needs to make an application to Revenue to pay the arrears by way of monthly instalments, he or she should write to the caseworker dealing with his or her case setting out the grounds for a phased payment arrangement. The taxpayer should also provide any
necessary supporting documentation to substantiate their request. Such documentation would include:

Details of the proposed duration of any such phased payment arrangement
A statement of his or her financial affairs, setting out his or her incomings and outgoings
A list of all assets held and, if relevant, the reason for non-disposal of these assets to pay the liability
An explanation why a loan cannot be obtained to discharge the liability or evidence of refusal of a loan.
Any PAYE taxpayer with whom Revenue agrees a phased payment arrangement will be required to:
Sign an agreement with Revenue to adhere to certain terms and conditions

Enter into a direct debit arrangement to make monthly payments from his or her bank account to Revenue’s account.

Agree to pay an interest charge over the term of the repayment period. Monthly instalment payments must include payment of the liability plus interest over the course of the arrangement as well as any penalties agreed and any interest charged to the date of the agreement.

Often easier to just get a loan and pay up as the interest charged by Revenue is higher than financial institutions. Any luck getting his company to cover the cost of telling their employees to claim a tax relief they weren't entitled to?
 
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To summarise the long cut 'n' paste above.

Ask Revenue to repay the tax refund over 4 years by adjusting your tax credits.

So if your tax credit is nomally €4,000 pa (I'm making up figures) it will now be €3,375 pa for the next 4 years.

I think you might be able to make a case to not have to pay interest, esp as its a small amount.

Annoying, but not the end of the world.
 

The cut and paste is there so the taxpayer has the actual path Revenue have to follow. Interest is statutory so there no scope for avoiding it in the intervention space. In order to have the underpayment collected via the code forward, a good financial case has to be made to get that method.

I'd be interested to hear from the OP as to how they got on with the HR department who told their employees to claim this credit and have now put this financial burden on their employees.
 
MRSBAN said:
They want us to take out a loan. Under normal circumstances we would have spent the refund but we had literally just bought and moved into our first home.
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Thats Revenue policy to ask you to take out a loan, its up to you to proactively suggest an alternative.

If you have just moved into a new house that provides a nice simple justification for not being in a position to get a loan.

Thirsty's suggestion of 4 years through tax credits seems ambitious to me, but it would make a good initial suggestion. Dont let it lie, Revenue are more likely to be receptive if they see its being dealt with not left lying.

Let us know how you get on.
 
MRSBAN said:
Were you able to organise a standing order? They want us to take out a loan. Under normal circumstances we would have spent the refund but we had literally just bought and moved into our first home.
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I've had a google on this for you. It seems that if you get revenue to agree the tax credits route than you may not have to pay interest.

Rules for different types of unpaid debts

If you have debt you have not repaid, what happens can depend on the type of debt it is
www.citizensinformation.ie

Phased payment arrangements

If you owe money to Revenue for unpaid taxes, you may be able to agree a repayment arrangement. However, in general, interest applies to any late taxes and so you have to pay this as well. In some cases, penalties may also apply.

If you are paying income tax through PAYE and you underpay in a particular year, you may be able to pay the amount due by having your tax credits in a subsequent year reduced. In general, interest is not applied in these circumstances.

In other cases where you have not paid or have underpaid your tax, you may be able to agree a phased payment arrangement. This generally does involve the payment of interest as well as the amount owed.
 
Mandelbrot can the OP get off with paying no interest if she goes down the tax credits route. Would revenue go easy on her given it was a genuine mistake by them and they are clearly short of money.
 
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