Collection
Case Study: Man refunded over €17,000 from Revenue after clarification of residency status
Published on
Last updated on
Published on
Last updated on
Mark made a complaint to the Ombudsman after he received a notice from the Revenue Commissioners saying he had underpaid his income tax. Mark did not believe he had underpaid his tax and was concerned that Revenue had actually deducted too much tax from his salary. Mark had worked outside the State for some time. He had earned nearly €76,000 with around €31,000 deducted in income tax and universal social charge. Mark had tried to resolve the issue with Revenue over a three-year period but was unsuccessful. He had provided Revenue with all the information he had available and responded to all of its queries.
Mark queried whether or not his declaring himself as a ‘non-resident’ might have made a difference to his liability but he had not received a clear answer from Revenue.
Revenue confirmed to the Ombudsman that Mark had enquired about declaring himself as ‘non-resident’. Mark’s employer had requested an ‘exclusion order’ from Revenue but only submitted the request in September 2019 - which was after Mark had commenced work outside the State. A PAYE Exclusion Order means that none or a reduced amount of income tax or Universal Social Charge is deducted from a person’s income. The exclusion order starts from the date a person leaves the State. It remains in place while the person is non-resident and working abroad. A PAYE Exclusion Order may be issued if the person is employed abroad by an Irish employer, all of their employment duties are carried out abroad, and they will be non-resident in Ireland in the tax year.
In the circumstances, and in light of the information Mark had supplied over a number of years to Revenue, the Ombudsman requested that Revenue review Mark’s case.
Revenue completed a review of Mark’s circumstances. It was satisfied that Mark was ‘non-resident’ for the periods in question and therefore he had a reduced liability for income tax and USC. As a result, it refunded Mark €17,700.