Revenue says I underpaid tax. What happens now?

Why underpayments happen

• A credit was removed or reduced during the year, for example when a job ended, but payroll had already given the full amount.
• A taxable social welfare payment, such as Illness Benefit or Maternity Benefit, was not fully taxed through your credits.
• A second job or a bonus pushed income into the 40% band after credits had been allocated.
• Income not taxed under PAYE, such as casual work or rental income, was declared.

Your options

1. Check the Statement of Liability against your Employment Detail Summary and payslips.
2. Complete or amend the Income Tax Return to claim any credits or reliefs you missed. The underpayment is recalculated.
3. Under 6,000 euro: let Revenue collect it by reducing your credits over up to four years (interest free), or pay some or all of it in myAccount under Payments.
4. 6,000 euro or more: Revenue will write to you about payment. An accountant may be worth consulting.

How the credit reduction feels

Revenue's own example: a 400 euro underpayment collected over four years reduces credits by roughly 2 euro a week. Your Tax Credit Certificate shows the reduced figure for each year.