It is a long established principle in tax case law that emoluments from an employment are taxable in the year in which they are earned (and not necessarily assessable in the tax year in which such emoluments are paid). In addition to such principle, Section 112 Taxes Consolidation Act 1997 provides that where an individual receives emoluments from a former employer, such emoluments are assessable in the tax year in which the employment with that employer ceased.
I am informed by the Revenue Commissioners that in contrast, the PAYE tax deducted in 2010 from the 2009 arrears (paid in 2010) is given as a credit in the 2010 tax year even though the arrears are assessable in 2009. I am further informed by the Revenue Commissioners that in the case in respect of which details are supplied, the relevant arrears have been correctly assessed in the 2009 tax year and the individual has received full and proper credit in the 2010 tax year in respect of the PAYE tax deducted in 2010 from the 2009 arrears. Taking one year with the next, the overall position gives rise to a repayment of tax that issued on 31st August 2011.
Finally, Revenue were not aware of the arrears of pay situation until representations were made on 11th August 2011 on behalf of the individual in respect of whom details are supplied.