Taxpayers lose out on millions by failing to claim reliefs

Most Irish taxpayers are missing out on tax refunds by not claiming for medical expenses that they incur, according to advisers at Taxback.com.

In a survey of 1,200 people across the State, 63 per cent said they had never claimed relief for medical expenses.

This comes against a background of Revenue acknowledging that €620 million may have been overpaid by taxpayers in the three years to 2021. Revenue has previously stated that the relief most ignored by taxpayers is that covering medical expenses.

Relief on medical expenses paid, and not covered by other private health insurance policies, can be claimed at 20 per cent though nursing home expenses are claimable at a person’s higher income tax rate – up to 40 per cent.

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Figures disclosed by then minister for finance Paschal Donohoe last summer showed that Revenue estimated an overpayment of €300 million by up to 450,000 taxpayers in 2021, or an average of €667 each. That figure is up on €150 million covering 270,000 people in 2020 and a €170 million projected overpayment by 300,000 people in 2019.

Asked why people fail to claim refunds they are due, more than four in 10 survey respondents said it simply never crossed their mind or they were unaware they might be eligible to get some money back.

A further 27 per cent agreed that people did not want to engage with the tax authorities for fear they could end up owing money while another 12 per cent said the process was simply too complex or time-consuming. One in 10 put it down to laziness while 7 per cent thought most people were not owed anything in the first place.

[ Are you one of the 500,000 taxpayers owed tax back for 2022? ]

“January is undoubtedly the busiest month of the year for doctors with flus, respiratory viruses, not to mention Covid-related illnesses [being] at their peak,” said Taxback.com director of business development Marian Ryan. “But our survey and indeed Revenue statistics show that most of these people will not request the refund they are entitled to on these medical expenses.”

While it might be understandable that people fear ending up with a bill when dealing with the tax authorities, she said ignoring such an issue and hoping it goes away was never the best option. “Also, in our experience, the number of people who wind up owing the Revenue money is very low compared with the volume of unclaimed refunds each year so the chances are strongly in people’s favour,” Ms Ryan said.

Medical expenses used to be claimed on a form called Med 1 but they are now claimed by way of a standard tax return after the end of the tax year.