Revenue has updated guidance on PAYE settlement agreements to include a new section relating to the repayment of overpaid income tax, PRSI and USC in respect of prior years. Where the taxpayer (in this case, the employer) has overpaid an amount of tax under the settlement agreement a claim for repayment can be made subject to the four-year time limit.
Revenue intends contacting taxpayers who entered into settlement agreements for the tax years, 2021, 2022, 2023 and 2024. Employers seeking a refund must review the correspondence received from Revenue, write to the appropriate Revenue division in line with the instructions included in the correspondence and include all requested documentation.
Each refund claim will be assessed individually based on its specific facts and circumstances and if a refund is approved, Revenue confirms in the guidance that interest of 0.011 percent per day will be paid from the date the tax was originally paid until the refund is issued under Section 865A(1) TCA 1997.
The example in the guidance has also been updated to reflect PRSI rates applicable from 1 October 2025.
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