P21 balancing statement - Advantages and disadvantages

[PaddyW]

Hi, been reading loads about people getting p21 balancing statements and was looking to find out the advantages and disadvantages. My tax has been fairly constant over the past few years, so I don't think there's anything owed to me, but would a p21 tie up all loose ends there might be, even if I did end up owing them money, is it better to sort it sooner rather than later?

Any advice is welcomed.

 

[Graham_07]

While Revenue can go back pretty much as far as they want, the taxpayer can only go back 4 years on tax they believe is overpaid. Balancing Statements are a clear way of "tidying up" each year. If underpayments arise, Revenue are generally amenable to collecting such over one or more years by deduction from future tax credits. They also provide the taxpayer with a complete picture of each year at a glance should any figures be reuquired for whatever purpose in the future.

Revenue have been known to issue a Balancing Statement on the strength of information available to them without the taxpayer initiating the procedure. I had one such case recently where they computed a large underpayment over several tax years. However on my review of the case I discovered several items the taxpayer was due relief on that Revenue did not know about and also errors in Revenue's originals through incorrect S/Welfare amounts going in. The net result was several thousand Euro refunded to the taxpayer.