Tax problem for a 'piggy in the middle'

S

Starbuck

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Yes, I'm that piggy, and I'll explain the problem. Maybe someone out there can advise.
I took early retirement from my Irish employer in 2016. There was a 'voluntary redundancy package' on offer which I decided to take. The agreement was that this lump sum was to be tax free. But on resignation my employer told me they believed tax was indeed due on a portion of the lump, and they deducted it, saying it would be forwarded to Revenue.
I then commenced a lengthy battle (with the help of a tax accountant) challenging the deduction ('ll skip the boring details) and just two months ago Revenue finally agreed that I shouldn't have been charged, and they refunded the money - less about 600 euro.

When we queried that we were told they refunded me all they had received. In other words my employer had deducted X but only forwarded X minus 600 euro to Revenue!

My accountant told me Revenue don't make such mistakes and to contact my ex employer (a major Irish company) to ask them to confirm the amount they had sent to Revenue.

Again to cut a long story short, they've mostly ignored my efforts to contact them (I'm now living overseas) and finally when they did respond to my email (in which I suggested legal action may be afoot) they told me the Payroll Department are 'looking into it'. That was a month ago. I'm once again getting no replies to emails and all calls go to voicemail.

My accountant says he can do nothing, and has lost interest in it.

So the situation now is that my ex-employer made a tax deduction of a certain figure and they said (at the time in 2016) they sent it all to Revenue.
Revenue say they received a figure which is about 600 euro LESS than the employer actually deducted from me, and obviously they won't refund what they didn't receive.

Neither side will talk to the other, and neither is talking to me. I'm piggy in the middle.

I suppose this is a simple error - probably by Payroll - and they could probably look this up in a few minutes and confirm what they sent to Revenue. Then we could straighten it out. So why the foot dragging? I'm trying not to think that someone, somewhere, has fraudulently deducted that 600 euro and pocketed it.
But it's a possibility which is growing in my mind by the day.

So I'm looking for suggestions on how to proceed.
I could of course contact a lawyer - but the missing 600 euro (if recovered) would probably only cover his costs.
Is there any other legal avenue which I could pursue (from abroad)?

Thanks for reading!
 
Firstly, tax can be incurred on the non-statutory element of any redundancy payment so your employer was right in theory as to what they said but the exact amount (if any) is different for each individual.

In regards to the payment they then subsequently made, it's doubtful (but not impossible) that someone pocketed the €600 but what is more then likely happened is that someone messed up in payroll.

One thing to check, did you receive a Pay in Lieu of notice payment (PILON)? That is taxable and therefore you should have been taxed on that. Were you and is your accountant happy it was done right

Payment of Wages act does not cover redundancy payments so your options here are limited. Personally, I'd send them a snotty letter, with the bill from your accountant (as the only reason you incurred those costs was due to their error) and demand payment of the outstanding money, + interest + costs by a certain date, otherwise you will be instigating legal action. Then see what happens. However, if they don't pay I'm not sure short of taking that legal action, what else you can do.
 
Thanks Folks - is WRC a 'Workers Representative Council'? I'm not familiar with the acronym.

Peanuts, there was a group of about 20 of us who all left with this deal, but I'm the only one who has this discrepancy, and we all went through the same process. So I don't believe a PILON issue is involved.

To be honest, after having this hassle ongoing for 5 years, and only now to fall at the last hurdle, I'm tired of it, and really sickened that I have to start it all up again. There seems to be no justice in the land.
 
If your employer deducted €x as payable to Revenue and then actually paid on €x-€600 this is a serious matter. The amount if any that should have been deducted is an entirely separate matter.

This is a fraud on the Revenue and I have seen them deal very harshly with such things. In small businesses.

Of course you refer to a major Irish company. If there were hundreds of people on the payroll, joiners, leavers, emergency tax, week 1 tax, changing tax credits and a dozen other things €600 might be a rounding error in the company's P35, so Revenue might not be too interested.

However if you have a payslip or similar showing a deduction in excess of the amount paid to Revenue, a specific complaint might get a response. If you have a clear paper trail I think the company might rather pay up than risk Revenue opening a can of worms.
 
Thanks again to all who replied. I'm interested in that suggestion to contact the WRC (I didn't know the Labour Relations Commission had changed their name). It's worth a try. I'll look them up.
Elcato, there was indeed a USC/PRSI element in the original deduction, and that was fully refunded as separate payments, so they are identifiable and fully reconciled. It's only the Income Tax element of the refund that shows this discrepancy.

cremegg, I do tend to believe that it's just a mix up, and perhaps it's a big pain in the neck to sift through all the transactions that were going on at the time to deduce where the error arose. I can imagine nobody in there wants to do the dirty work of digging it all up.
I don't have a specific payslip - all I got was a letter saying how much they'd be deducting, which is indeed the amount they took at the time. It's just now, when Revenue are refunding the lower figure, that it comes to light that 600 euro is missing and can't be traced.
I'd love it if Revenue would take an interest in this, but really, would they?
 
Starbuck, I don't mean to offend. It's over five years since you departed the company. You have a simple enough query which can only be resolved with your former employer's payroll department. This is not going to happen in a few days. It will take a few months for the whole issue to be resurrected by payroll staff and processed. I presume you're keeping notes of all contact with your former payroll department since.

You can contact WRC but this won't speed up the situation; if anything it may even delay your claim. But, if you feel this is the way to go, then drive on. I am not flippant when I say payroll sections are usually pretty busy and some problem dating back nearly six years won't get "immediate" attention. Therefore, I would advise you deal solely with people in Payroll and note and record the names of the people with which you have dealt.
 
Gordon Gekko said:
Is the WRC a potential option?

Something in the back of my mind says you only have six months though.
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Yes, it's six months for a breach of the Payment of Wages Act. It can be extended by another six months for "reasonable cause" but even that is long expired. Time runs from the date of the contravention which would be the original deduction. (Set out in Section 41(6) and Section 41(8) of the Workplace Relations Act, 2015.)

Only legal option left is to sue in the District Court. Statute of Limitations is six years and you're getting close to that too. Talk to a solicitor if you want to go that road. But beware of costs.
 
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Leper said:
Starbuck, I don't mean to offend. It's over five years since you departed the company. You have a simple enough query which can only be resolved with your former employer's payroll department. This is not going to happen in a few days. It will take a few months for the whole issue to be resurrected by payroll staff and processed. I presume you're keeping notes of all contact with your former payroll department since.

You can contact WRC but this won't speed up the situation; if anything it may even delay your claim. But, if you feel this is the way to go, then drive on. I am not flippant when I say payroll sections are usually pretty busy and some problem dating back nearly six years won't get "immediate" attention. Therefore, I would advise you deal solely with people in Payroll and note and record the names of the people with which you have dealt.
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Leper, I'd be willing to wait a reasonable time (though 6 years is quite a wait already) but I actually have had no contact with Payroll in months - they don't have a working phone number, and they aren't responding to emails. In fact I'm not even sure they are open to visitors either (if I was in Ireland). They are effectively in hiding behind an impenetrable wall. Quite bizarre. I don't know how current employees with pay problems are managing.
Baby boomer said:
Only legal option left is to sue in the District Court. Statute of Limitations is six years and you're getting close to that too. Talk to a solicitor if you want to go that road. But beware of costs.
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Yes, as I wrote above, suing them is pointless for 600 euro. A solicitors letter will cost me that. (/sarc)
 
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