Some tax tips to consider regarding your finances as we start the New Year.
- If you were made redundant during 2012, you may be due a tax refund
If you were made redundant during 2012 and paid tax on your redundancy payment, you should file your top slicing claim as soon as possible in order to obtain a refund of any tax overpaid.
It is not unusual for part of a redundancy payment to be taxed at the top rate of 41 per cent. The purpose of this relief is to ensure that your redundancy payment is not taxed at a rate in excess of your average tax rate for the previous three years.
Similarly, if you were not working for the full year or emigrated during 2012, you may be due a refund of income tax, particularly if you are not in employment at the end of the year as you would not have received the benefit of your tax credits for months out of work.
- Review your Tax Credit Certificate
You and/or your employer should by now have received your certificates of tax credits and standard rate cut-off points for 2013. You should review this certificate to ensure you have been granted the correct rate of credits and standard rate band, and also ensure that all credits to which you are entitled have been included e.g. employee flat rate expenses, PAYE tax credit, personal tax credit, medical insurance credit (if paid by employer) etc. If your credits are incorrect, it will result in an over or underpayment of PAYE at the end of the year.
If you are married and jointly assessed, you should also review the allocation of credits between each spouse to ensure it suits your circumstances, e.g. if one spouse is self-employed and the other is an employee, you can dictate whether most of the tax due is paid under PAYE or in a lump sum on assessment by the manner in which the credits are allocated.
- Review your life assurance cover
Life assurance rates have come down significantly over the last 12 months. If you have an old policy in place, you may be overpaying for your existing cover. In addition, if you were made redundant in 2012, you are most likely no longer covered under your previous employer’s group scheme. Life cover is relatively inexpensive to put in place and is essential for families with young children.
- Carry out a financial health check
Now is a good time to review your financial and tax situation and ensure that you have a plan for 2013. Coll & Co are independent, fee-based financial advisors and specialise in this area. Hourly consultations are now also available.
The above information should be treated as a guide only. If you would like assistance with your tax affairs, contact Coll & Co Chartered Accountants in Barna by phone on 091-592080 or by email at firstname.lastname@example.org. Coll & Co specialises in personal tax and pensions advice. Coll &Co Chartered Accountants is regulated by the ‘Chartered Accountants Ireland’ to provide investment advice.