Latest on Service Charges Tax Credit

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Latest from the Wednesday Club

Service Charges Tax Credits were the topic of conversation in the Wednesday club this week. Most of us just consider claiming tax back on our refuse charges when we think about service charges relief. However, not only can you claim for your bin tags, wheelie bins and skips but you can also claim for your sewage disposal costs and water supplies provided by your local authority or group water schemes.
You can claim up to 4 years in arrears. This means you may claim in 2010 for charges paid in 2009. So at present you can claim as far back as 2005 since tax relief for these payments applies to the tax year 2006.
The total tax relief that can be claimed is subject to an overall limit of €400 therefore you can get a maximum tax credit of €80 for each year (€400*0.20). If you claim the maximum for the 4 years you’ll get a refund of €320!

Who can claim tax relief on Service Charges?

This tax relief may be claimed by an individual who pays the service charges for a premises.
This tax relief may also be claimed by a person who pays the service charge and lives on a full time basis in that premises but is not the liable person to pay the charge for example, a son or daughter who lives with a parent and pays the service charges.
Those of you that live in an apartment complex can still claim relief for your service charges. All that is needed is a statement from the management company showing the amount of the fee relating to service charges.

Termination of Service Charge Relief

Unfortunately tax relief on service charges will be terminated by 2012. It is now a good time to start claiming your tax relief for 2005-2009. Tax relief is granted in each tax year in respect of charges paid in the previous tax year. Therefore in 2011 you will be able claim tax relief for services charges paid in 2010. So keep your receipts for 2010 because 2011 will be the last time you may claim back service charges relief!