At the end of the year you can request a P21 balancing statement. This is a year-end review of your tax liability. A P21 statement gives details of your total income, tax credits, tax reliefs and PAYE tax paid for a particular tax year. If you have overpaid tax you will be entitled to a refund. You may have overpaid tax if your tax credits are incorrect or you haven’t claimed tax relief for certain expenses.
If you supply your bank account details in ‘My Profile’ within myAccount, your refund will be transferred directly to your bank account. Otherwise, you will receive a cheque by post.
What happens if I have paid too little tax?
An underpayment of tax is when you have paid less tax than you were liable to pay. If you have paid too little tax you will owe Revenue the difference between what you actually paid and what you should have paid.
An underpayment will remain on your tax record with Revenue until it is paid. Your P21 or end of year review will show if you have underpaid tax. It will also inform you how the underpayment will be collected. Usually, you will not pay money directly to Revenue. The easiest way for Revenue to collect the underpayment is to reduce your tax credits in the following year.
If you are a PAYE taxpayer and you are registered with Revenue’s PAYE Anytime service you can view your tax credit certificate online. PAYE Anytime is available through Revenue’s MyAccount Service. Your tax credit certificate will show the tax credits that your employer is deducting from your tax bill.
For expert advice on accounting, auditing and taxation services please contact us at McEvoy Craig