Claiming tax relief for AVC.

C

Confused28

Registered User
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26
Hi.
I’m in the process of claiming tax relief for AVC payments in 2025, ie.getting my tax credits adjusted for current year rather than a back dated claim.

I am a 40% public sector tax payer and intend paying €6000 in 2025. These payments will be paid from my bank account and not from payroll.

I am within the pension threshold and it is my understanding I should receive relief at 40%, ie. €1500.

After entering my details/figures, I appear to be getting a tax credit of €1200.

Is this correct? Can anyone familiar with procees, shed any light on something simple I might be doing incorrectly. I don’t want to submit incorrect info and have to go to the bother of sorting later.

Much appreciated.
 
Confused28 said:
After entering my details/figures, I appear to be getting a tax credit of €1200.
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Normally relief is given by increasing your standard rate band and also giving you a tax credit so that you only get 40% relief on income that you've actually paid 40% tax on and 20% otherwise. Check your credits and standard rate cutoff.

In your case it should be a tax credit of €6K @ 20% = €1.2K and then your standard rate band should also be increased by €1.2K.
 
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Thanks for responding. I’ll check that. Yes, that makes sense. I incorrectly said the relief should totally €1500, when it should be €2400. I will keep an eye on it. Thanks again.
 
Hello.
Just one more question in relation to this.

When claiming the credit, I’m being asked 3 questions.
1. Amount of AVC payable by you in 2025 on which relief has not already been granted? = €6000.

2. Amount of AVC contributions relieved
under the net pay arrangement in 2025?

3. Amount of total net pay contributions relieved under the net pay arrangement in 2025?

Question 2 and 3, are they referring strictly to the €6000. Do I reply €0x2.

Anything done through payroll, is this all accounted for? See, I have another AVC through payroll for a small amount, approximately €3000. Do I state this figure in question 2?

And then question 3, does this include a total including my public sector pension payment?

I’m not sure.

Any advice, much appreciated. Thanks.
 
Confused28 said:
See, I have another AVC through payroll for a small amount, approximately €3000. Do I state this figure in question 2?
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Yes.
Confused28 said:
And then question 3, does this include a total including my public sector pension payment?
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Yes. Main scheme contribution (not including ACS) and the €3,000. That's my reading of it but I've submitted a question to one of the providers for 100% clarity. If it's any different, I'll update this.

Confused28 said:
3. Amount of total net pay contributions relieved under the net pay arrangement in 2025?
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This used to say - Amount of ordinary contributions relieved under the net pay arrangement in (year) so I'm assuming Revenue had questions from tax payers on it and decided that total net pay was clearer.


Gerard

www.execution-only.ie
 
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Thanks Gerard for response.

So that’s how I would have interpreted the questions too. However the answer it is giving me is not what I was expecting. Perhaps I’ll give the figures for clarity and Maybe somebody can interpret.

So going on last years figures. Total earnings = €73437.66
Now maybe the problem is I am wrong in my understanding that I can contribute up to 25%, ie. 18000 approx into pensions, either through my main employment or AVC’s?

So filling out the questions when applying for tax credit are as follows,

1. Amount of AVC payable by you in 2025 on which relief has not already been granted? Answer = €6000

2. Amount of AVC contributions relieved under the net pay arrangement in 2025? Answer = €2759.52

3. Amount of total net pay contributions relieved under net pay arrangement in 2025? Answer = €6338.42

Based on these responses revenue is saying Allowable AVC relief is €3282.40

And tax credit will be increased by €656.48.
———————————————————

Based on what I was expecting and the interpretation of how it is applied by tax credit and increasing tax bands this would only be 50%.

So unless I am completely misinterpreting how much a public sector employee can can pay into an AVC , where do people think I am going wrong?!

Any advice appreciated as always. Thanks
 
So….. just to update I phoned revenue. The person I spoke to stated the figures were to be entered as above. And also stated I should be getting 40% relief on the €6000.

He couldn’t answer why the credit was coming up as is.

He told me to submit it and enter an enquiry and they would get back to me.
 
Confused28 said:
He couldn’t answer why the credit was coming up as is
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It's almost certainly because of what I explained earlier - relief is given via a combination of a tax credit and increasing the standard rate band. To ensure that you get 40% only on income that you have actually paid 40% tax on and 20% otherwise. Did you check your standard rate band before and after applying for the relief as I suggested?
 
Hi Clubman.
What you’re saying makes sense. I have taken note of the tax bands and will see do they change.

My only concern is they seem to be basing the tax credit applied on an Allowable AVC relief of €3282.40 and not €6000. So where this is coming from I’m not sure.

Anyway I’ve applied for the credit and submitted the enquiry. I will see what they come back with.
 
Hi.
I entered information incorrectly initially. I didn’t realise I had to enter the amount of my public service pension contribution. When I entered information incorrectly the allowable AVC relief was on €6000 and tax credit was €1200.

When I included my public sector pension contribution and avcs paid through payroll, the allowable AVC relief was on €3282.40 and tax credit was €656.48.

Sorry for confusion.
 
Hi Confused28. I am also finding this tricky. Grateful if someone could look at my numbers below and let me know if they make sense.

Estimated gross employment income in 2025

€132,000 (NOTE: this is my salary for 2025)

Estimated Net relevant earnings (according to Revenue, this consists generally of employment income less deductions which would be made in computing total income for tax purposes. These deductions include losses and capital allowances. Earnings as a proprietary director, proprietary employee of an investment company or self-employment income are not relevant earnings)

€69,600 (NOTE: I'm not sure what to put here. In addition to the usual tax deductions, I will be paying €10,100 in ASC as a public sector employee, as well as €7,200 in AVCs, which is how I've arrived at the €69,600 figure. Maybe I don't include the AVC figure?).

Amount of AVC payable by you in 2025 on which relief has not already been granted

€7,200 (NOTE: I plan on paying €600 per month for 2025).

Amount of AVC contributions relieved under the net pay arrangement in 2025

€0 (NOTE: I don't know what this means, but I have no other AVCs).

Amount of total net pay contributions relieved under the net pay arrangement in 2025

€0 (NOTE: Again, I don't know what this means, but I have no other AVCs. Do I include the ASC of €10,100 though?).

Amount carried forward from a prior year from which relief has not been obtained

€0

Allowable AVC relief

€7,200 (NOTE: This is calculated by Revenue, and looks correct).

Tax credits increased by

€1,440 (NOTE: I was expecting this to be €2,880 i.e. 40% of €7,200, but when I queried it with Revenue last year, they confirmed via MyEnquiries that my standard rate cut-off point had also been increased, albeit that I am not sure how to check this).
 
INYWIFNW said:
€1,440 (NOTE: I was expecting this to be €2,880 i.e. 40% of €7,200, but when I queried it with Revenue last year, they confirmed via MyEnquiries that my standard rate cut-off point had also been increased, albeit that I am not sure how to check this).
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I explained already how such relief is given via the two pronged tax credit and increase to the standard rate band. It's done this way in order to ensure that the claimiant doesn't get 40% relief on income that only 20% tax was actually paid.
ClubMan said:
Normally relief is given by increasing your standard rate band and also giving you a tax credit so that you only get 40% relief on income that you've actually paid 40% tax on and 20% otherwise. Check your credits and standard rate cutoff.
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You should be able to check your statement of tax credits on myAccount and see the credits and standard rate band.

What is a Tax Credit Certificate?

This page details what a Tax Credit Certificate is
www.revenue.ie www.revenue.ie
 
GSheehy said:
That's my reading of it but I've submitted a question to one of the providers for 100% clarity. If it's any different, I'll update this.
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Confused28 said:
The person I spoke to stated the figures were to be entered as above.
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It appears not...

For @Confused28

1. €6,000 = AVC payable by you in 2025 on which relief has not already been granted in 2025
2. €2,759.52 = Amount of AVC contributions relieved under the net pay arrangement in 2025
3. €338.42 = Amount of total net pay contributions relieved under the net pay arrangement in 2025

So, @ 40% , €1,200 for the credit adjustment and same for the amendment to standard rate cut off.
 
Confused28 said:
Amount of AVC contributions relieved under the net pay arrangement in 2025? Answer = €2759.52
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You've stated that €2,759.52 is the AVC figure via payroll.

Are you saying now that the difference between €6,338.42 and €2,759.52 is what your main scheme contribution is?

Your main scheme contribution should be circa 5/6% of salary.
 
GSheehy said:
Are you saying now that the difference between €6,338.42 and €2,759.52 is what your main scheme contribution is?
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Yes.

Is that not how you told me to interpret question 3? Main scheme+AVC’s paid and accounted for, not including ASC.
 
GSheehy said:
That's my reading of it but I've submitted a question to one of the providers for 100% clarity. If it's any different, I'll update this.
Click to expand...

Sorry, 3. should be €3,578.80 so. Mea culpa, not sure what I was thinking.

You don't put in the €2,759.52 AVC via payroll twice and Revenue told you that you were right in doing this.
 
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