Nobody wants to pay more tax than they need to, right?
Despite this, many people overpay each year by not claiming back what’s rightfully theirs.
And with the cost-of-living crisis still affecting people's spending power, claiming a tax refund is a quick and easy way to put some money back into your pocket and help cope with the rising cost of living.
Here we'll discuss the main expenses on which you can claim a tax refund and how to apply for one.
When should you claim a tax refund?
The best time to claim a tax refund is usually January or February after the end of the previous tax year (which runs from 1st January to 31st December just like the normal calendar year).
However you can actually claim a refund going back up to four years, so in 2024 you can claim a refund going as far back as 2020. And if you're a PAYE taxpayer, you can now claim relief on some expenses such as health expenses in real time during the year. Meaning you don't have to wait until the end of the tax year to get what you're owed.
However your tax affairs need to be in order. If Revenue is missing information on your previous year’s income from your employer, for example, they’ll need this before processing any refund.
Tax credits versus tax relief
When you’re claiming back tax; you usually either claim a tax credit or a tax allowance.
A tax credit works by reducing the amount of tax that you pay by the size of the tax credit. So a €500 tax credit would reduce your yearly tax liability by €500. A €1,000 tax credit means you pay €1,000 less in tax and so on. It’s that simple.
Some tax credits, like the PAYE tax credit, are given automatically to you by Revenue meaning you don’t have to do anything. However others you must claim.
A tax allowance, often referred to as tax relief, works a little differently to a tax credit.
Tax reliefs reduce the amount of income on which you pay tax, and will usually result in you getting a refund on some of the tax that you've paid previously. The value of a tax allowance/tax relief will depend on two things: the top rate of tax that you pay and whether the relief is allowed at the higher rate of income tax that you pay or is restricted to the standard 20% rate.
So if you claim tax relief of €100 it’ll be worth €20 to you if you pay income tax at only 20% and €40 if you pay income tax at 40% and the relief is allowed at the higher rate.
What can you claim?
Medical expense relief
You can claim back 20% on most professional medical and health expenses that you’ve incurred over the past year.
Lots of expenses such as GP visits, consultant fees, prescribed physiotherapy and counselling sessions, acupuncture, routine maternity care, hearing aids, and IVF are all covered.
Non-routine dental expenses like braces are also covered although things like fillings, scaling/cleaning and tooth extraction are all considered to be routine dental treatments, so won't be reimbursed unfortunately.
If you have health insurance which covered some of the costs, you can apply for tax relief on the balance. For example, if you spent €150 on three doctor’s visits last year and got €50 back from your insurer, you can apply for tax relief of 20% on the remaining €100.
Flat-rate expense allowance
Flat-rate expenses are a form of tax allowance that can be claimed by workers in certain industries with the intention of helping towards the costs associated with their job. Costs can include anything from tools to uniforms and even stationery, according to Revenue.
There is a set amount allocated to each occupation and everyone can claim the same amount, regardless of how much they earn - hence the name 'flat rate'.
Everyone from archaeologists to veterinary nurses are eligible for the allowance. For example, occupational therapists in Ireland are able to claim up to €217 in cases where they are obliged to supply and launder their own uniforms, while carpenters and joiners can claim a tax allowance of €220 for the cost of their equipment and tools.
Recently, Revenue carried out a comprehensive review into flat-rate expenses and concluded that some of the existing allowances were no longer valid and there were fears Revenue could end up abolishing some, if not all of them, resulting in a nasty pay shock for workers. However they’ve held off for the time being - so claim what you can while you’re still allowed!
E-worker relief / Working from home relief
With more and more of us working from home these days, interest in the tax relief available to those working away from the office has skyrocketed.
Since 2022, you can claim tax relief on up to 30% of your heating and electricity costs and up to 30% on your broadband costs.
However 30% is the absolute maximum you can apply for and would only be possible if you spent 365 days working from home. Your home working costs must be apportioned based on the number of days you have actually worked from home.
To calculate your e-working or home working costs Revenue has come up with the following simple equation, which it will calculate automatically for you when you apply online:
- multiply your utility bills by the number of days you worked from home
- divide by 365
- multiply by 30% (0.3) for heating and lighting and 30% (0.3%) for broadband
You can then claim tax relief at either 20% or 40% on this amount. For more info, see our guide on e-worker relief.
Rent tax credit
This is a new tax credit that was introduced for renters in 2022. It's available to tenants or parents paying rent on behalf of a student (as long as they're under 23 at the start of their first year.)
It's worth up to €750 a year for a single person and up to €1,500 a year for married couples and civil partners.
You must spend at least €2,500 a year on rent to qualify for the full rent credit if single, or at least €5,000 a year for married couples or civil partners. However given record rents right now, most renters will easily pass this threshold.
If you're in a houseshare and several of you are sharing the rent, you can all apply for the credit and receive the full amount as long as you meet the criteria.
However the rent isn't available to renters who receive State housing supports (such as the Housing Assistance Payment or Rent Supplement). Also, if you're at home and paying rent to your parents you can't claim the credit either.
Tax relief at 20% is also available on eligible third-level tuition fees. Here the relief is available to the person who has paid the fees, not the person who's studying. So this means you could claim tax back on your children's tuition fees as well as your own if you go back to college.
The relief is available on both part-time and full-time courses.
However the relief only applies to amounts up to €7,000 per third-level course per year. Also, no relief is available on examination, registration, or administration fees or for things like student levies or sports centre charges.
The €7,000 limit is per course, per person, per academic year. So if you have paid fees for yourself and one of your children, are studying more than one course, or have two children in third level at the same time, you can claim up to €7,000 for each course.
The first €3,000 of fees for a full-time course (which equals the student contribution for full-time courses) and €1,500 for a part-time course DOES NOT qualify for relief each tax year. However this only applies to the FIRST claim you make; if you make a second claim in the same year then you can claim on the full qualifying amount up to €7,000.
Home carer tax credit
Most people are unaware of the home carer tax credit. This tax credit currently stands at €1,800 a year, having been increased by several hundred euro over the past few years, and can be claimed by any married couple or civil partnership where at least one of the spouses is a stay-at-home carer for either a dependant or their own children.
However some part-time work is allowed. You can earn up to €7,200 a year and claim the full credit. If you earn above this amount but below €10,600 you can claim a portion of it.
If your income is €10,600 or more during 2023 then you cannot claim the tax credit.
As this is a tax credit, and not tax relief, it will be worth the full amount i.e. €1,800 to most people.
Age tax credit
There is also the age tax credit. This is in addition to the personal tax credit that all workers are entitled to and may be claimed once you or your spouse or civil partner reaches the age of 65. If you're single or widowed it's €245 and if you're married it's €490.
Nursing home relief
You can also claim income tax relief on nursing home expenses paid by you - either for your own care or that of others.
You can claim this relief at your highest rate of income tax.
Diet expense relief for coeliacs and diabetics
If you're a coeliac or a diabetic and have to buy gluten-free food or follow a specialised diet you'll know how expensive it can be. As a result, you can claim tax relief on the cost of food that's specifically tailored for these types of diets.
To qualify for this relief you will need:
- To be diagnosed by your doctor as a diabetic or coeliac,
- A letter from your doctor stating that they have advised you to maintain a diabetic or coeliac diet
Tax relief of 20% can then be claimed against the cost of any specialised food purchases for coeliacs or diabetics in supermarkets, health stores or chemists.
How to claim a tax refund
If you’re going to claim tax relief you’ll need to keep copies of all your bills and expenses as proof of expenditure. If claiming the e-worker relief you should also get written correspondence from your employer to state that you were working from home and are thereby eligible to claim it.
You don’t need to include any bills or documents when applying for any relief, however you should keep these for a period of six years in case Revenue decides to audit your claim in which case they may come looking for proof of receipts and bills etc. However you now have the option to upload and store online a copy of any receipts at the same time that you're making a claim, meaning you won't have to worry about holding on to receipts.
So 2023 tax relief can be claimed from January 2024 provided all your tax affairs are in order.
When completing your tax return you can then claim for any additional reliefs or credits.
- Sign into Revenue's myAccount
- Under PAYE Services, click on ‘Review your tax’
- Request a Statement of Liability
- Click on 'complete income tax return'
- Claim additional tax credit, relief or expenses
- Submit your form
Your claim will take around a week or two to process and if it's successful your refund will be credited directly into your bank account within three working days or so.
Check out our other guides
If you found this guide helpful, make sure you check out some of our other personal finance guides. You might be interested in the following:
- With more of us now shopping online than ever before, it’s important to stay vigilant. Take a look at this advice to ensure you’re shopping safely and not getting scammed.
- Planning a trip abroad? Here’s how you can avoid foreign exchange fees when travelling.
- If you’re thinking about starting a pension, you might be interested in our beginners’ guide to pensions.
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