Thousands of Irish workers have been left confused after receiving letters from Revenue saying that they owe tax.
Revenue has already issued around 275,000 letters, with a further 100,000 expected to be sent in the coming weeks.
In line with the usual annual cycle of customer contacts, Revenue is currently writing to taxpayers in relation to their end of year tax position for the years 2019, 2020 and 2021.
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The correspondence provides taxpayers with a preliminary position which may indicate a potential overpayment or underpayment of tax.
Taking to the social media platform TikTok, Irish bookkeeper Mairead explained what the letters mean after she was inundated with messages from worried workers.
She said: "So in the last week or so, a lot of people are getting letters from Revenue stating that they owe tax, and I'm just going to explain what is going on there because my DMs are just going nuts.
"I don't have an example of these letters, but basically, they are just saying that you owe X amount. Some of them are up to €1300, and they're telling you to complete your income tax return.
"They are sending this letter out to you because you owe tax from a prior year, and this is more than likely to do with the years 2020 and 2021, so chances are it's related more than likely to 2020 because a lot of people were put on the PUP and the other thing was the Temporary Wage Subsidy Scheme which a lot of employers were on but didn't tell their employees.
"And when your employer was claiming this wage subsidy, Revenue weren't collecting tax for those employees, and if your employer didn't tell you about it, you're getting a letter now, and you're surprised."
Mairead went on to explain that the letters could also be in relation to previous years.
She said: "Now, this liability could be to do with four years ago as well in 2018 or 2019 and so on because you have up to December of this year to complete your income tax return for 2018.
"But more than likely, it's to do with the PUP. If you remember being on it or you know that your employer was on the TWSS, then likely it's because you owe tax."
But Mairead said there is no need for people to panic.
"So the good news is Revenue will not come knocking on your door for this tax don't panic.
"What they do is revenue collect tax of any liability that the employee owes over four years, so, for example, the 2020 PUP, the tax that's owed on that is already being collected over the year 2022 to 2025 and so on that is Revenues default way of collecting tax, but my advice is to try and reduce it as much as you can."
A taxpayer can opt to pay any income tax and USC liability (fully or partially) through the Payments/Repayments facility in myAccount.
Mairead said: "If you've never done your income tax return before, go back to 2018 and do the last four years, 2018 to 2021, because you never know you might have a couple of medical expenses there that you should have claimed flat rate expenses check out if you can claim on any of those.
"Your goal here is to try and reduce that liability if you can."
She added: "You should be logging in and checking out your income tax return either way because some people log in who have never done it before, and before they even start doing the steps, they realise they are owed a refund of up to €1000. So you won't know until you check it out, so that would be my tip."
Over 800,000 PAYE taxpayers have already filed a return for 2021 and claimed a cumulative total of approximately €420m in refunds.
In a statement to the Irish Mirror, Revenue said: "Having regard to the overarching, urgent Government objective of getting much needed assistance to employees as quickly as possible, these payments were not taxed in 'real-time'.
"Tax due on PUP amounts paid in 2020 was determined by way of an end-of-year review of the employee's liability.
"The impact of this emergency measure was that some PUP recipients have an additional tax liability for 2020."
It added: "The TWSS was introduced by the Government on 24 March 2020 at the beginning of the Covid-19 pandemic and ran until 31 August 2020. Revenue was responsible for administering the TWSS on behalf of the Government.
Revenue explained: "In order to maximise the financial support provided to recipients, income tax and the Universal Social Charge (USC) on TWSS payments was not collected in real-time through the PAYE system and instead the liability for the 2020 tax year was determined at the end of the year.
"In relation to an employee covered by the subsidy, the employer was obliged to show the amount of the subsidy paid to the employee on the employee's payslip.
"The TWSS was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020. However, the EWSS was paid directly to eligible employers in respect of qualifying employees and, consequently, EWSS re-established the normal requirement to operate PAYE in real-time on salary paid to the employee by the employer."
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