Tax relief explained
Tax relief can benefit Irish taxpayers as it allows you to reduce the amount of tax you pay or claim back tax you’ve already paid to the government, potentially providing you with a lump sum. On this page, you’ll learn everything you need to know about tax relief, how it works, what you can claim tax relief on and how you claim it.
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What is the meaning of tax relief?
‘Tax relief’ is a reduction of the income on which you pay tax to the government. You can get tax relief in a few ways, including tax on your income, tax rebates on business expenses, older people’s tax relief, medical tax relief and working from home tax relief. Some tax relief is automatic, while others you’ll need to apply for.
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What’s the difference between tax relief and
While tax relief reduces the amount of your income on which you pay tax, tax credits reduce the amount of tax that you actually have to pay.
How does tax relief work?
Certain payments, such as gifting money to someone, paying a loan, or paying into a pension can be made without having to pay tax. For example, income tax is deducted directly and automatically from your salary by your employer.
In Ireland, gifting money and assets is pretty easy, but it’s important to bear in mind that some gifts can be taxed by the government. Find out more about gift tax, the gift allowance and gifting exclusions.Read more
Alternatively, if you’re self-employed or receive income from another source, you can claim tax back from Irish Tax & Customs. To do this, you’ll need to complete a self-assessment tax return so that they can determine your level of tax relief.
Tax relief is based on your tax band, which is 20% or 40%.
Am I eligible to claim tax relief?
One way that you’re eligible to claim tax relief is if you use your own money to purchase things needed solely for business purposes. If you’re self-employed, you can make claims on expenses you’ve incurred to run your business, but you cannot claim tax relief if your employer pays for your expenses.
You can also claim tax relief if your employer has asked you to work from home. You won’t be able to claim this if your decision to work from home was voluntary.
You also receive tax relief as an older person, based on the income tax bracket you’re in. It’s worth looking into your pension documents to check whether you need to do this yourself or whether your pension provider does it for you.
You’re also entitled to tax relief on the following:
- Medical expenses, such as private healthcare
- Some housing expenses
- Third-level tuition fees
- If you’re a home carer or single person child carer
What can I claim tax relief on?
You might be eligible to claim tax relief on the following things:
- Uniforms and tools: Cleaning, repairing, and replacements of uniforms, and repairing or replacing tools you need for your job. This can be anything from a pair of scissors to electric machinery.
- Vehicles: If you use a vehicle for work, you may be able to claim tax relief. However, how much you can claim will depend on the vehicle and whether you own or lease it, or whether it’s a company vehicle.
- Travel and overnight expenses: You can claim tax relief on travel and overnight expenses for your work. This includes transport costs, accommodation, food and drink.
- Professional fees and subscriptions: If you’re required by your company to subscribe to approved organisations, you may be eligible for tax relief.
- Working from home: You can claim tax relief if your company has asked you to work from home. Tax relief can be applied to extra bills you may need to pay, such as telephone, electricity and internet.
- Buying other equipment: Some equipment you need for work, such as a computer, is eligible for tax relief.
How do I claim tax relief?
If you file a self-assessment tax return with Irish Tax & Customs, you can make tax relief claims for expenses during this process. You can also check your eligibility and claim tax relief through the Irish government website.
You can also find out about the ways to claim different types of tax relief from Citizens Information.
How far back can I claim tax relief?
You can claim tax relief for expenses made up to four years previously. To make the claim, you must have records of what you’ve spent. If you’re claiming for a current tax year, Irish Tax & Customs will make the adjustments based on your tax code. For claims on previous years, they will either make adjustments or give you a tax refund.