Brian Cowen (Laois-Offaly, Fianna Fail)

I am informed by the Revenue Commissioners that the number of reviews of tax liability sought by PAYE taxpayers in the past three years which resulted in refunds are as follows: as of 23 September 2005, there were 322,361 such reviews and the amount refunded was €282 million; in 2004, there were 350,016 reviews and refunds of €278 million; in 2003, there were 314,298 reviews and refunds of €265 million; and in 2002, there were 304,272 such reviews. The amount refunded in 2002 is not immediately to hand but I will revert to the Deputy with the information as soon as possible.

PAYE is a tax collection system which was designed to collect an employee's tax liability for a year on a cumulative basis over the year. The correct amount of tax can only be collected where the employee has claimed and been granted in the annual notice of tax credits and standard rate cut-off points all the reliefs to which he or she is entitled. Revenue can only allow tax credits or reliefs on the basis of the information that is known to them. If the information on the tax credit certificate is incorrect or incomplete because of inadequate information received from the taxpayer or if there is a change in circumstances in the course of the tax year which is not notified to Revenue, the system will not operate as intended and the tax deducted will be incorrect.

The vast majority of taxpayers are conscious of the credits and reliefs they are entitled to and, where claims are necessary, take the required action. Revenue makes every effort possible to inform taxpayers of their entitlements and, where additional tax credits are claimed, the necessary adjustments in the taxpayer's affairs are speedily made.

Some reliefs need not be claimed as they are given at source, for example, pension contributions, permanent health insurance, medical insurance and mortgage interest. Others need only be claimed once as they will remain constant in the taxpayer's profile over the year, for example, basic tax credits, PAYE credit and trade union subscriptions. In this instance, once claimed, the reliefs are automatically carried forward from year to year. The only reliefs that need to be claimed on an ongoing basis are those that are expenditure related, such as medical expenses relief. Such claims give rise to the greater part of repayments of tax since the relief cannot be quantified until after the end of the year.

Revenue is already very proactive in the manner in which it ensures that PAYE taxpayers are made aware of their entitlements and facilitated in claiming these. Revenue keeps this issue under constant review and takes whatever steps are necessary with regard to public information campaigns to continue to inform taxpayers of their entitlements and to simplify, as far as possible, the arrangements for making these claims. The upcoming bulk issue of more than €2.2 million in tax credit certificates for 2006 will be the focus of an information campaign, as will the roll-out of the PAYE on-line system in early 2006. I emphasise, however, that the primary responsibility for ensuring that Revenue has the most up-to-date information on a taxpayer's affairs lies with the taxpayer.

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