Renters may miss out on ‘cumbersome’ new €500 tax credit

Renters can claim a tax credit of up to €500

Renters can claim a tax credit of up to €500

January 04 2023 09:10 AM

Renters may miss out on the new €500 tax credit as the process is “quite cumbersome”, according to one tax expert. Revenue has announced that people will have to wait until mid-February to claim the new tax credit announced in the Budget.

However, many young taxpayers eager to claim it have taken to social media to express their struggles around understanding the process. “I’ve gone through the steps of what’s involved and it’s quite cumbersome. There’s a lot more detail in it than I’ve seen for any other tax credit,” Dublin-based tax advisor Alan Purcell said. “I don’t know if they’re specifically being awkward and making this intimidating and difficult to claim.” Mr Purcell also points out that many tax payers on lower incomes will not receive the entire €500. To get the full amount, a person would have to have earned at least €19,500 in 2022. 

“The tax credit just reduces the tax you have to pay, so if you haven’t actually paid any tax, there’s no credit to get because you can’t reduce your tax lower than zero,” he said. “People are understandably eager to get their hands on their money, especially amidst all the costs-of-living issues last year. But something like the rent tax credit is brand new so I usually tell people to wait because there are a few things that need to be finalised. It’s definitely a bit of a learning curve.”

Mr Purcell (35), is not your stereotypical accountant, he uses his Instagram to educate people about everything tax related. “I’ve heard from people that they go to bigger accounting firms and feel like a very small fish in a very large pond,” he said. “When you’re not one of the big earners, you tend to be ignored and I wanted to bridge that gap. I also want to cut out all the accounting jargon and answer questions in plain English.”

There’s a lot that people seem to miss out on when it comes to tax and Mr Purcell believes that using social media to educate and inform can help people claim the money they deserve. “Every year, you see these articles in November and December saying there’s only so many weeks left to claim tax back from four years ago. Millions and millions are left on the table basically because people just aren’t aware of these things.”

This year, tax payers can claim tax credits and gross relief for a number of reasons including medical prescriptions, remote working, electricity, third level education and their broadband connection.

“Off the back of Covid, a lot of small businesses faced so many financial challenges. This is the year they need to bounce back and somehow fight the rising costs. Who knows what might be happening in terms of recession, this is an important opportunity to get at least some of it back.” Mr Purcell has been working closely with people in Dublin who are either looking to set up their own small business or to help them report and file their accounts on time.

A qualified chartered accountant, he spent the last two years training to become a tax advisor and helping people out during his free time. “Everyone is scared of Revenue and the tax office. Taxes are quite complex and it’s not taught very well at school,” he said. “When it comes to small businesses, they end up putting off filing their taxes until the deadline and it gets very panicky.”

Article Source –Renters may miss out on ‘cumbersome’ new €500 tax credit – Independent – Azmia Riaz

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