In response to queries regarding the end of year calculation of the income levy on Schedule E income, where the levy had been deducted at source during the year, Revenue has published eBrief No. 60/10.

In eBrief No. 60/10, Revenue confirms that the composite rates are to be applied to all relevant income for the year. This includes Schedule E income, which may have already suffered the income levy at the different rates in force for the periods 1 January 2009 to 30 April 2009 and 1 May 2009 to 31 December 2009. The important point to note is that a change in Schedule E income in 2009 may have resulted in an underpayment of the income levy for the 2009 year. This will give rise to an additional liability to the income levy for that year. These anomalies are a direct consequence of a poor implementation of the change of levy mid year, which had been flagged at the time by Chartered Accountants Ireland, unfortunately to no avail.

Examples illustrating the cases where an underpayment of the income levy may arise are set on in the eBrief, which is available here. http://www.revenue.ie