Vol. 512 No. 8
52 Mr. Aylward asked the Minister for Finance if the correct tax free allowance has issued to a person (details supplied) in County Kilkenny; and if he will give a breakdown of his new tax free allowance following the recent budget. [27363/99]
I am informed by the Revenue Commissioners that, according to the information available to the inspector of taxes, the taxpayer is in receipt of all of the tax-free allowances to which he is entitled for the current tax year, 1999-2000.
Based on the figures included in the recent Budget Statement the taxpayer's tax-free allowances for the tax year 2000-01 are estimated as follows:
|
£ |
|
|
Personal Allowance |
5,700 |
|
PAYE Allowance |
1,000 |
|
Age Allowance |
800 |
|
Expenses |
50 |
|
7,550 |
|
|
Less |
|
|
Social Welfare Pension (estimate) |
5,000 |
|
Net Tax-Free Allowance |
2,550 per year or £49.04 per week. |
53 Mr. R. Bruton asked the Minister for Finance whether, under his proposal for deduction at source of mortgage and VHI tax allowances, the consumer will pay a net sum each month or have to pay gross and get a refund from the relevant institution at the end of the tax year, thereby requiring the taxpayer to carry the cost of funding this amount until the refund comes through. [27366/99]
In my Budget Statement on 1 December 1999, I indicated that I was proposing to move, with effect from 6 April 2001, to a system of tax relief at source in respect of both medical insurance premiums and mortgage interest payments.
Deduction at source under these new arrangements will mean that the consumer will pay a net amount – after relief at the standard rate of income tax – to a medical insurer or a mortgage provider as the case may be. For example, if a premium of £100 is payable to a medical insurer such as the VHI or BUPA, the taxpayer will, from April 2001, obtain tax relief on that premium at source by making a payment of £78 instead of £100. The medical insurer will then claim a refund of £22 – representing the amount of the tax relief – from Revenue. The position will be similar for mortgage interest
The proposed arrangement will simplify the tax system by minimising paperwork and form-filling for taxpayers – while maintaining the full tax value of the relief. In the context of changing over to the new tax credits system, a reduction in the number of reliefs that appear on a tax-free allowance certificate will make it easier for taxpayers to comprehend the new system. Above all, relief at source will provide the relevant relief to the taxpayer as and when he or she makes a premium or mortgage interest payment.
