BIK where employer also pays Tax&PRSI on Form 11 ?

Usjes

Hi,

As per:
(http://www.revenue.ie/en/tax/it/leaf....html#section2)
As under the previous system in force to 31 December 2003, an employer may make an arrangement with Revenue to pay on behalf of their employees the tax and PRSI due in respect of certain taxable benefits provided for the employees.

If my employer does this for me, does anyone know how I account for this on the Form 11? ie my P60 says that I have received a BIK of €100 say, and the employer has paid the Tax and PRSI on the grossed up amount (€188) which is fine if I am a PAYE employee, but if I am required to fill out a Form 11, how do I signal that my employer has already paid the Tax/PRSI on this BIK, if I just fill in my income as per my P60 (which includes the €100 BIK) the Form11 calculation will expect me to pay a further €47 which is not correct.

Anyone know how to handle this correctly?

Thanks,

Usjes

Bold Abdu

Usjes wrote: »

if I just fill in my income as per my P60 (which includes the €100 BIK) the Form11 calculation will expect me to pay a further €47 which is not correct.

Do as you say and all will be well. Revenue knows that the employer has already stopped tax on it. The tax is included on your P60 too.

Usjes

Bold Abdu wrote: »

Do as you say and all will be well. Revenue knows that the employer has already stopped tax on it. The tax is included on your P60 too.

> Do as you say and all will be well.
This makes no sense, what I have said is that I see no way of correctly accounting for this BIK in my Form 11 filing and I am asking for help.

> The tax is included on your P60 too.
No, it's not, and that is the problem. The income on the P60 is increased by the notional amount of the BIK (€100) and my employer has entered into a special arrangement (per the link in my original post) with the PAYE department to pay the PRSI & Tax on my behalf however this is NOT reflected on the P60. When filing for Income Tax (as opposed to PAYE) my liability will be calculated solely on the information entered into the Form 11 and any knowledge any other revenue division (eg PAYE) may have is irrelevant. So for the calculation to work out correctly and not tax me again on this €100 there should be a box somewhere to effectively list a tax credit for the tax/PRSI my employer has already paid and it is this that I am looking for help with because I can't find it myself.

Bold Abdu

Sorry I read your question in a hurry and assumed you were generally confused when you said you had an employer but weren't an employee :-)

Strangely I've never actually come across this situation before and I don't think it can be dealt with on the Form 11. I would address it with a letter/email to Revenue.

2ndcoming

Taxable benefits in respect of which PAYE and PRSI have been paid by the employer under the arrangements referred to at Employer arrangements to discharge employees' liabilities to tax and PRSI - paragraphs 1 - 4 above will not count as income of the employees concerned for either tax or PRSI purposes nor will the employees be entitled to a credit for the tax or contribution record for PRSI paid under such arrangements.

This is the key bit. None of it should be included in the P60. You don't declare the benefit because the tax has already been paid on it. There should be a section in the form for benefits received in employment (on which tax has already been deducted at source). This one won't affect your assessment, except for USC presumably.

barneystinson

2ndcoming wrote: »

This is the key bit. None of it should be included in the P60. You don't declare the benefit because the tax has already been paid on it. There should be a section in the form for benefits received in employment (on which tax has already been deducted at source). This one won't affect your assessment, except for USC presumably.

I'd have expected if the employer is doing a gross-up exercise and paying over the PAYE/PRSI, they should be including appropriate USC as well - that's the whole point of the arrangement, that they are covering the tax costs for the employee.