Should have been paid last year - losing out to tax

Hi all,

Just looking for advice. I did some work in November 08 and was meant to be paid in December. However, the employer messed up and didn't submit the claim form on time to the finance dept. Therefore, I am going to it in this tax year.

The problem is that I didn't work for 5 months last year and therefore didn't earn enough to be taxed in the higher tax band but now that the money is going to be paid this year I will be taxed in the higher tax band thus loosing out on about €300. Do i have any come back on this?

Thanks

Re: Should have been paid last year - loosing out to tax

Nothing to worry about.

If you invoiced in 2008, it's 2008 income. It doesn't matter that it was paid in 2009.

Re: Should have been paid last year - loosing out to tax

It is not clear whether you are a PAYE worker or self employed.

If you are a PAYE worker, you have a problem and I don't know the answer.

Brendan

Re: Should have been paid last year - loosing out to tax

A fact that escapes the notice of many is that PAYE is not a tax: it is a method of collecting tax, the tax being income tax.

For most people there is no particular advantage or disadvantage in letting the system operate as it does. But in a situation like yours you can apply to the Revenue to have your income tax formally assessed, attributing your income to the year in which it was actually earned; PAYE payment can then be offset against the true liability. You might need to bear in mind that many clerical staff in the tax office are not aware of this, as their job is the operation of PAYE, not the assessment of tax.

I am not sure how your 2009 PAYE might be operated if you applied for review at this point. It is much more clear when tax years are finished.

Re: Should have been paid last year - loosing out to tax

Thanks all,

I'm a PAYE worker. I'll check with the revenue to see what can be done about it.