So you've worked all summer long and maybe did a bit of part time work during college , December arrives and you're broke. It's Christmas and who doesn't like a nice Christmas present? This year Mr. Tax Man could be your new Father Christmas! How? Why? The answer is that you could be entitled to some tax back. If you have been in PAYE employment during the year and have paid tax, you should be able to claim back at least some of the tax paid when you give up work.
There are two Revenue allowances which are used to determine your take home pay - your tax credit, and your standard rate cut-off point (SRCO). You SRCO determines how much income you can earn at the standard rate (20 per cent), before you begin paying tax at the marginal rate (42 per cent).
To ensure that taxpayers can be relatively certain of their income each week or month, Revenue divide these allowances equally over the year. Therefore, if you don't work for the entire year, you will not yet have used your allowances. On making a claim to Revenue, these allowances can be set against your income from earlier in the year, which should result in a tax refund.
Remember, you can only reclaim tax that has actually been paid. If you only paid €400 in tax this year, then the maximum refund available is €400. But know that normally people don't get a 100% of the tax they paid back. It could still add up to a nice few euro in your back pocket on those long winter nights.
To claim a refund of tax, you must fill out a form P50, and send it to your local tax office together with a copy of your P45. The P50 is available from your local tax office, or from www.revenue.ie.
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