It's emerged Revenue Commissioners have used the Rent Tax credit to offset bills accrued as a result of employees being on the Temporary Wage Subsidy Scheme.
The scheme was introduced in 2020, while the country was in lockdown as a result of COVID-19.
Anyone in the scheme received a subsidy from the public purse, but it was not subject to tax at the time.
Revenue committed that any tax liability built up as a result of this could be paid off over 4 years through reduced tax credits.
However, the rent tax credit has been used to offset those bills in some cases - the extent of which is unclear.
Need for 'common sense' approach
“Unfortunately, Revenue is well within their rights to do this,” says tax advisor Mairead O’Driscoll.
“I think a lot of people were nervous about these crazy tax bills coming in after COVID, and some are perhaps confused by it all.”
She adds: “It is outlined that any tax owed will be spread over the next four years but it’s also outlined that it can be reduced by any tax credits or reliefs that you are due.”
However, Sinn Fein’s finance spokesperson, Pearse Doherty, believes there needs to be a common sense approach taken by Revenue on this matter.
“There is a process in place in relation to how payments made during the pandemic are dealt with,” he said.
“The fact that now this is interacting with the rent tax credit in a way that renters are not getting the feel for it is not, in my few, appropriate and it needs to be changed.
“If you’re sitting in an apartment in Dublin and you’ve applied for it, then you’ve budgeted for that.
“To get a letter from the Revenue saying that we’ve offset that against another liability – that’s a struggle and a challenge for a lot of people during a cost of living crisis.”
Revenue Commissioners have yet to outline how many taxpayers have been impacted by the move.