Vol. 547 No. 1
442 Mrs. Barnes asked the Minister for Finance the reason overtime was not paid to staff of the Houses of the Oireachtas in the run up to Christmas 2001 (details supplied); if a refund of the income tax deducted in the current tax year on moneys earned in the year 2001 can be arranged; and if he will make a statement on the matter. [2456/02]
I refer the Deputy to my reply to questions on 20 November 2001 in which I outlined the payroll processing schedule which would apply in the run-up to the new year and the reasons for this. This schedule was adhered to during the Christmas and new year period. My Department sent the relevant payroll schedule details to the personnel section of the Houses of the Oireachtas on 30 October 2001. It was emphasised that overtime claims received before 1 p.m. on 20 November would be paid before Christmas and overtime claims received after this deadline would be paid in January 2002. Overtime claims received after the 20 November deadline were processed in order of receipt and were paid on 4 and 11 January 2002.
I am informed by the Revenue Commissioners that under the PAYE system an employer is obliged by the Income Tax (Consolidated) (Emoluments) Regulations 2001, to deduct tax at the date of payment of the emoluments by reference to the employee's tax credits and standard rate cut-off point as at that date. Where emoluments earned in November and December 2001 – year of assessment 2001 – are paid in January 2002 – year of assessment 2002 – the employer is obliged to deduct tax from those emoluments by reference to the employee's tax credits and standard rate cut off point at the date of payment in January 2002.
Under the tax credit system, tax is deducted at 20% from the amount of an employee's gross pay up to his or her standard rate cut-off point and on any excess at 42%. The system operates on a cumulative basis. In practice, this means that each week of the tax year the system re-calculates an employee's tax liability up to that week by referring to the salary and overtime already paid and the tax already paid. The employee will, during the year, receive a refund of any excess tax that may have been deducted earlier in the year. I am informed by the Revenue Commissioners that the question of entitlement to a refund of tax paid in 2002 on income earned in 2001 can only be adjudicated upon after the end of the current tax year 31 December 2002. An employee who wishes to apply for a refund of tax may do so after 31 December 2002 by submitting his or her P60 for both years 2001 and 2002 to the Inspector of Taxes, Division 66 unit 669, 85/93 Lower Mount Street, Dublin 2.
Question No. 443 answered with Question No. 422.
