I recall that Deputy Burton proposed a similar Committee Stage amendment last year. However, I am not in a position to accept it. In common with the public sector generally, the Ombudsman's remit covers the Revenue Commissioners but what is proposed in the amendment is different. The Deputy's suggested use of the Ombudsman's office in the manner proposed would be inappropriate and probably require a legislative change in the extent of her remit.
As I told the Deputy last year, the PAYE system is not a tax system, merely an income tax collection mechanism. It was designed to collect, in so far as is possible, an employee's correct liability to income tax for a year within that year. However, the system's ability to operate in the manner intended in individual cases is dependent on the taxpayer concerned supplying to the Revenue Commissioners correct and full information on his or her income and tax entitlements. Without such information, the system is prone to throw up underpayments or overpayments. In the case of the vast majority of taxpayers, the system acts as intended.
It is the position that some reliefs need not be claimed or need be claimed only once. Claims are not required where the relief is given at source, for example, pension contributions, permanent health insurance, medical insurance and mortgage interest. Reliefs that need only be claimed once are those that will remain constant in the taxpayer's profile over the year, for example, basic tax credits, PAYE credit, trade union subscriptions and so forth. In this instance, once claimed, the reliefs are automatically carried forward from year to year.
In general, overpayments arise where a taxpayer does not notify the Revenue Commissioners of his or her full entitlements by the start of the year or notifies the Revenue Commissioners of a change of circumstances during the course of the year, for example, entitlement to additional reliefs or a cessation of employment. In some instances a notification from the taxpayer will be received too late to allow the employer to grant the relief during the year. In a considerable number of cases the overpayment arises from relief that can only be claimed or fully quantified after the end of the year, for example, medical expenses. In other instances what may be thought to be an overpayment may turn out to be an underpayment because non-PAYE sources of income have not been taken into account or fully taken into account in the deduction of tax under the PAYE system.
The vast majority of taxpayers are conscious of the credits and reliefs to which they are entitled and, where claims are necessary, take the required action. In ensuring the proper operation of the PAYE system and the tax system generally the Revenue Commissioners are proactive in advising taxpayers through various forms of media communications of their entitlements and obligations. In this regard, the most direct and beneficial notification is the notice enclosed with the annual notice of tax credits and standard rate cut-off point which contains details of all the tax credits relevant to an employee in the context of the operation of the PAYE system. This leaflet also contains details of how to claim an adjustment to tax credits.
The Revenue Commissioners' website provides easy to access customer service information on the full range of reliefs available to taxpayers, together with a range of claim forms for download and completion. The home page on the website contains a "What's new" section where the Revenue Commissioners alert customers to timely items of interest. The website also contains full details of the appropriate contact point should taxpayers wish to telephone, call in person, write to, e-mail or fax the Revenue Commissioners. There are 600 PAYE customer service staff available in the PAYE regional offices to deal with taxpayers' queries, amend tax credits, process repayments and so forth.
The Revenue Commissioners will shortly extend their present PAYE computer system to allow any PAYE taxpayer to access his or her Revenue records, that is, allowances or credits given and details of pay and tax, over the Internet at any time. They will also provide assistance for people to amend their tax credit certificate on the web, either to claim an allowance or credit not included in the certificate or to change the amount involved. They will enable them to request an on-line review or balancing statement based on the Revenue Commissioners' records and confirmation that the details are correct and complete and to receive an automatic repayment in certain cases where the Revenue Commissioners are fully satisfied from their records or recent contacts that a repayment is due.
Part of the new PAYE computer system will involve details of pay and tax from employers' P35 returns becoming available much more quickly than previously. The combination of on-line access and amendment, together with the availability of quicker and more reliable information on pay and tax, should help increase the reliability and accuracy of the PAYE system and reduce the number of PAYE overpayments that remain unclaimed. The new computer system will not change the fact that ultimate responsibility rests with the PAYE taxpayer to ensure that his or her tax credits certificate is correct or seek an end-of-year review if he or she feels that there has been an overpayment. Ultimately, where a taxpayer has overpaid tax for a year under the PAYE system, he or she is in the best position to know. In many instances, the taxpayer will be the only person who knows that tax has been overpaid.
Medical expenses reliefs are the subject of a later amendment for which a full reply has been prepared. I will address the issue at that stage; it is amendment No. 30. GPs provide receipts for attendance, and one can go to one's pharmacist at the end of the year and ask for a read-out of the tablets or medication that one has received during that time. People can take practical steps to ensure that they fully avail themselves of that relief.
Deputy Ó Caoláin mentioned the change-over to the new PAYE system. There have been some instances of errors, and they have received substantial media attention, particularly in the case of teachers. However, of the 2 million certificates being issued, instances of error involve a tiny percentage. They have been remedied without delay when identified and brought to the notice of the Revenue.