Tax - VHI and BIK

lolkelly

Hi,

I have a quick tax question that i hope someone can help me with. Basically i signed up for VHI through work. As part of my contract it stated that my company would pay my VHI for me.

I didnt do anything about VHI for the first 3.5 months of my job(I started in mid July). I then contacted HR and they said they would contact the VHI on my behalf. Everything was great and i got the necessary policy number and card.

Now to the trouble. I got my latest monthly paycheck at the start of this week and its down approx 100 on what it normally should be.

From looking at my paycheck i have a Benefit in Kind amount of 214 and my tax at a higher rate is 214 higher than the previous few months. I also paid a higher PRSI of about 15.

Anyway the overall effect of all this is that im down 100 than normal. I presume this is something to do with the VHI but can i claim back anything here?

Also will this be part of every monthly paycheck? I dont really get it because the Plan i get with VHI is only 45 a month.

Any replies would be great. Thanks

NuMarvel

It does seem to be something to do with the VHI although, the figures seem a little more than I would have thought. (I used to work in health insurance).

Bascially though, you can claim 20% tax relief back from the Revenue. Just give them a buzz. They'll need to know the "gross" value of the premium the company are paying for you. It should be on your membership details or maybe HR can give you the value.

I would also check with HR about the amount of BIK you're paying, it does seem alot for just one person. However, it might be that your cover was backdated to when you started with the comapny and you might be paying a year's worth of BIK over a shorter time frame, if that makes sense.

Hope it helps.

homah_7ft

lolkelly wrote: »

From looking at my paycheck i have a Benefit in Kind amount of 214 and my tax at a higher rate is 214 higher than the previous few months. I also paid a higher PRSI of about 15.

Also will this be part of every monthly paycheck? I dont really get it because the Plan i get with VHI is only 45 a month.

Any replies would be great. Thanks

I work out €214 as 4.75 payments (BIK). I'm guessing this is backdated to when you started. So it seems you are there 3.75 months and you get paid a month in advance (3.75+1). Since you receiving a large backdated benefit you are also paying a larger tax amount than normal. It's the same as if they gave you a large monetary increase in one month. Your benefits will now go back to €45 per month and your tax will reflect that.

In future your take home pay won't be down as much as €100 but it will be a little down on what you recieved in your first few cheques. Off the top of my head €25. You can get tax relief for this (20%). Just notify your local revenue office.

The_Conductor

OP- check with your Personnel/Salaries section- as VHI/BUPA group schemes are all structured in a TRS manner (and have been for a few years) which means the tax relief is granted to you at source- and you are not entitled to claim the 20% back from Revenue (as its reflected in a lower premia upfront). Its been that way for at least 3 years.

sarahmum2

smccarrick wrote: »

OP- check with your Personnel/Salaries section- as VHI/BUPA group schemes are all structured in a TRS manner (and have been for a few years) which means the tax relief is granted to you at source- and you are not entitled to claim the 20% back from Revenue (as its reflected in a lower premia upfront). Its been that way for at least 3 years.

If you're company are paying for you - then they have to repay the TRS to revenue. Your BIK is based on the Gross amount and you can claim the 20% relief from Revenue. as said before, just get the figure from your vhi cert or from HR.

Mr. Incognito

If you buy insurance personally Tax relief is granted at source.

Where insurance is purchased by the company on your behalf it is taxed gross and a corresponding credit may be claimed at 20%.

You can file a Form 12 to take account of this.

PMC999

sarahmum2 wrote: »

If you're company are paying for you - then they have to repay the TRS to revenue. Your BIK is based on the Gross amount and you can claim the 20% relief from Revenue. as said before, just get the figure from your vhi cert or from HR.

This is correct. If you add your spouse and/or dependents to your policy (and this is paid by your employer for you by way of deduction from your monthly salary) the tax relief is built in. However, as sarahmum2 said, you need to contact Revenue yourself to claim the tax relief related to your own policy. Personally I think Revenue were really sneaky when they insisted that BIK be charged on the gross premium not the net premium.

Conor03

I have also just joined VHI with work for myself, partner and 3 kids. This month is my first month and my payslip says BIK 352.01
I am down 108 in my take home wage. Do I need to contact revenue to claim 20% back?

DmanDmythDledge

The 20% you can claim back is 20% of the gross policy premium, not the BIK or tax deducted (just in case there is any confusion).

At present, your employer is receiving the Tax Relief at Source (TRS), being the payment of the net premium rather than the full gross amount. You should contact your local tax office for the TRS amount to be included in your tax credits, if it hasn't already been included.

Basically, your company is received the TRS at the moment rather than yourself. They will pay this back to Revenue and Revenue will pass this on to you.