Revenue has confirmed to Chartered Accountants Ireland that approximately 50 percent of Pandemic Unemployment Payment (PUP) recipients’ single persons weekly tax credits will fully cover any tax due on PUP payments in 2021.

Revenue detailed that approximately 50 percent of PUP recipients do not receive the highest rate of €350 per week and a single person’s weekly tax credits will fully cover any tax due by those on the lower weekly payment rates of €203, €250 and €300. Revenue noted that these recipients will in fact have built up credits of between €3.46 and €22.86 per week for the period out of work, which will be available for offset against any other liabilities arising once they return to work.

For a single person in receipt of the €350 PUP rate, their weekly tax credits will cover 90 percent of the tax payable, leaving tax due of approximately €6.50 per week.

Where a PUP recipient chose to have their tax liability on the PUP in 2020 collected interest free by reducing their employee’s tax credits over four years, their full employee tax credit continues to be available to them in 2021, as their tax credits will start to be reduced from January 2022.

When a PUP recipient returns to work, he or she should immediately cease the PUP claim with the Department of Social Protection (DSP). Once Revenue receives notification of the change from DSP, it adjusts the employee’s tax credits accordingly on a ‘Week 1’ basis and issues a revised Revenue payroll notification (RPN) to the employer. Revenue also issues a revised tax credit certificate to the employee.

See the Revenue website for more information.