Accounting for the taxsaver scheme

bwooster

Hi,

I have a question about accounting for the travel taxsaver scheme. Could or should this be accounted for on my books as an interest free employee loan or salary sacrifice? What would be the implications for either employee or employer of either method?

Thanks

Snowdrop

Is it a monthly ticket?

It doesn't really matter what account you use as the balance should be zero at the end of each month but I would avoid using the employee loan account as it is not a loan unless you have not been deducting from the payroll.

If you have not been deducting from the payroll, there could be a tax implication at year end.

bwooster

It is an annual ticket and I will deduct it from payroll. If it is accounted for as a loan, am I allowed deduct it from the gross amount? Would there be tax implications for the employee receiving the interest free loan, i.e. BIK?

I am not sure how other companies account for this.

namenotavailablE

My understanding is that it's an approved salary sacrifice scheme.

See pgh 8 of this document:
http://www.revenue.ie/en/practitioner/law/income-levy.pdf where a reference to 'similar schemes' is made.

Also pgh 4.22 of this document:
http://www.revenue.ie/en/practitioner/law/income-levy.pdf