There are so many tax forms and tax rates to keep track of and understand, it really can be mind-boggling! One of the most important elements of taxation is your tax credit certificate which plays a significant role in making sure you’re charged the correct amount of tax.
However, many people struggle to get their head around tax credit certificates and their purpose. To help you understand, our expert tax rebates team have answered a number of the most frequently asked questions regarding tax credit certificates.
What is a tax credit certificate?
Your tax credit certificate is a document declaring which tax credits are being used to reduce the amount of tax you have to pay. It also shows if you’re currently liable or exempt from contributing to the Universal Social Charge.
In addition to this, if your taxes are jointly assessed with your partner, it shows you how your relevant tax bands are allocated.
What do you use it for?
When you start a new job, this certificate is used by your employer. They will use this to calculate how much tax they need to take from your earnings each pay period.
If your employer does not have this, then they can’t use your credits to decrease the amount of tax you have to pay and you’ll lose out on some of your earnings. Luckily, you can always apply for a tax rebate if this is the case.
Who sends it out?
When you start work for the first time, you’ll need to fill out a Form 12A and send it to your local tax office to receive your certificate.
You’ll need to provide personal details like your PPS number and address along with employment details such as your employer’s name and registered PAYE number. After that, Revenue automatically sends you a new tax credit certificate each year.
Will it automatically show what tax credits I’m entitled to?
Generally, the Revenue office only considers the most prevalent tax credits, namely PAYE and personal taxation credits.
If you want to declare eligibility for more tax credits, you’ll have to do the research yourself first to see which credits you are eligible for. To ensure that you don’t miss out, we’ve listed exactly what tax credits you can claim for in article.
Can you have it changed?
If you want to add or remove tax credits from your certificate, you can apply to the tax office to get it updated. They can then issue you a new certificate. Remember, you can claim tax back for the past four tax years for any unclaimed tax credits. You never know, you may be due a sizeable rebate from unclaimed tax credits!