Revenue Commissioners is using the Rent Tax Credit to pay off tax bills accrued as a result of Government schemes during the COVID-19 pandemic, Newstalk can reveal.
In 2020, the Government introduced the Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) to assist workers and businesses which were severely impacted by lockdowns.
No tax or Universal Social Charge were paid if these schemes were used.
It has led to many workers facing tax bills, which Revenue said could be paid off over a four-year period.
This would be facilitated by means of reduced tax credits.
As part of Budget 2023, the Government introduced a Rent Tax Credit scheme.
It would be worth €1,000 for a couple, and €500 for a single person for both 2022 and 2023.
It was thought that the credit would be used to aid tenants in paying for their rent, as prices continue to rise across the country.
However, it can be revealed that Revenue Commissioners have not paid out the tax credit to some renters who accrued tax bills during 2020, if they were on the TWSS.
Instead it has used the sum to offset against the bills, which for many PAYE workers they would not be facing only for the Government introduced the schemes during the COVID-19 pandemic.
'Rent Tax Credit'
In a statement, a Revenue spokesperson said: "Once a tax return has been submitted, a Statement of Liability will issue shortly thereafter, setting out the individual’s final tax and USC position for the year.
“Where a refund is due, this will be processed within three to five working day to the bank account details that are on the individual’s Revenue record.
“If the taxpayer has an underpayment for another year on record that is not being collected through a reduction in their tax credits in a future year, the refund due to him or her will be used to reduce the amount owed.
“This includes cases where there is an underpayment of tax from 2020 as a result of the Temporary Wage Subsidy Scheme," they added.
Revenue 'well within their rights'
Tax advisor Mairead O’Driscoll has said Revenue are "well within their rights" to do this.
“I think a lot of people were nervous about these crazy tax bills coming in after COVID, and some are perhaps confused by it all.
"It is outlined that any tax owed will be spread over the next four years but it's also outlined that it can be reduced by any tax credits or reliefs that you are due,"she added.
However, Sinn Fein's Finance Spokesperson Pearse Doherty believes there needs to be a common sense approach taken by Revenue on this matter.
“There is a process in place in relation to how payments made during the pandemic are dealt with,” he said.
“The fact that now this is interacting with the rent tax credit in a way that renters are not getting the feel for it is not, in my view, appropriate and it needs to be changed.
"If you’re sitting in an apartment in Dublin and you’ve applied for it, then you’ve budgeted for that.
"To get a letter from the Revenue saying that we’ve offset that against another liability – that’s a struggle and a challenge for a lot of people during a cost-of-living crisis," he added.
Revenue Commissioners has yet to outline how many taxpayers have been impacted by the move.
