Tax refund reduced because I made charitable donations?

I have just completed tax returns for the past three years as I am due a refund of circa €500 for 2020 due to change in employment.

Having completed my returns for 2020, 21 and 22, I have now received from Revenue, my balancing statement of liability for each year.

For 2020 my statement contains the line:

"A payment of €524.00 will be made to your bank a/c. Your refund may be restricted due to donations paid to Charities/Approved Bodies."

In the line above, it says "Tax refunded to Charitable Organisations - €548".

Does this mean I won't get a tax refund?

I have made donations to charities in excess of €250 and completed the relevant CHY3 forms. These are always encouraged by the charities saying that they will be able to collect extra money, and it won't cost you the taxpayer any extra. But from reading the above, maybe I will now owe €24 in tax because I made donations, or else not get my tax back.

Can anyone tell me what the above means? Will I get the tax refund or will it be withheld because I have made charitable donations? TIA

Sounds like they're refunding you €524, and "topping up" your charitable donations by €548, but informing you that you may have received more if you hadn't made your charitable donations? Admittedly the wording seems a bit confusing.

Fair play to you for making donations sufficient for the charities to claim the tax back.

That wording is very confusing and I have not come across it before.

The tax you pay is, normally, completely separate from any donations you made to charity. So if you are due a refund of €524, then you should get that, whether you made donations to charity or not.

However, the amount claimed by the charity cannot be more than the tax you paid.
Let's say you €10,000 donations in a year. The charity can claim an additional 45% or €4,500.

If you have paid €8,000 tax, then they get the full €4,500
If you have paid only €2,000 in tax, the charities will get only €2,000.

I wonder in your case have the charities claimed €548.

Say you had originally a tax liability of €600 , so the €548 was paid out.
Now you are due a refund of €524, which would bring your liability down to €76.

But they paid out €548 so they must reclaim that from you?

Brendan

It doesn’t sound right to me.

As far as I know, my donations are tax neutral for me, whereas in the good old days they was a tax benefit.

I checked with Revenue and they said that the following:

The charitable donation should show on your Notice of Assessment but the Assessment may have issued prior to the claim being processed. I have reissued your Notice of Assessment for 2020 and 2021 today.

Then the amounts appeared under the following heading




Unfortunately, there is no breakdown. Just a figure. And it seems to be less than charities could have claimed.

And charities have told me the same thing. They get a refund but for GDPR reasons they are not told which taxpayer it refers to.

Brendan

ClubMan said:

Sounds like they're refunding you €524, and "topping up" your charitable donations by €548, but informing you that you may have received more if you hadn't made your charitable donations? Admittedly the wording seems a bit confusing.

Click to expand...

That's exactly what it sounds like. If the OP only paid €1072 in tax then they may have missed out on a bigger rebate due to the Revenue payment to charity.

Thanks so much for all your replies.

Just an update, I did receive my tax refund in full. I was completing forms for 20,21 and 22 and received a refund of circa €700. Therefore, it does not look as though I was penalised for giving to charity.

I found the wording confusing on the Revenue side. I will have to re-read it to try to understand it. If what post #6 above is correct, it would be a deterrent to completing the CHY forms.