Receiving back a benefit in kind payment

Coburger

Hi, my company recently made a contribution towards my VHI payment for the year. However, for this, I had to pay more tax (the benefit in kind). I don't see that much of an advantage of my company making the payment then if I'm just taxed a few hundred euros more.


Is there anyway to receive back some of this benefit in kind?

silent_spark

I’m not sure what you’re asking, OP. The benefit in kind is your company’s contribution toward your VHI, this (the value of that contribution) is what you pay tax on. The benefit to you is that you’re getting the full value of that VHI contribution but at a fraction of the cost.

allthedoyles

Get a letter from your employers with the annual amount and send it to tax office

Rulmeq

So you paid at most 50% (I'm assuming there's PAYE, PRSI and USC on this, if not reduce as appropriate) of the VHI amount, and you want to pay 100% instead, just so you can get the 50% back?

I know that people get irrational when tax is involved, but that's just taking it too far.

Edit: I realise you could mean you just don't want VHI at all, in which case fair enough.

Coburger

I think my company made a contribution of around €350 of my VHI policy but I was then taxed nearly €300 extra. Is this normal? There doesn't seem to be much of an advantage there.

Can I reclaim back this tax?

silent_spark

Coburger wrote: »

I think my company made a contribution of around €350 of my VHI policy but I was then taxed nearly €300 extra. Is this normal? There doesn't seem to be much of an advantage there.

Can I reclaim back this tax?

That doesn't sound right. Are you sure it was only €350 they paid?

If the correct tax was applied, then there's nothing to reclaim. If it turns out you were incorrectly taxed, payroll should correct it and it will balance out in your next pay run.

Check with your employer the total benefit in kind they paid to VHI, the tax you pay should at the most be half of that, depending on your tax bracket and credits.

namenotavailablE

Don't forget that you need to claim the TRS (Tax Relief at Source, capped at 20% of €1000 for an adult premium) directly from the Revenue Commissioners. This will be a reduction in the tax you're charged in respect of the BIK.

As an aside, a company contribution of €350 resulting in additional tax of €300 seems incorrect- a very rough maximum ballpark figure should be 40% PAYE + 4% PRSI + likely max of 8% USC (if you're earning more than €70K per year, otherwise 4.75%) which equates to 52% of €350 or €182 in additional deductions.

wally1990

Coburger wrote: »

I think my company made a contribution of around €350 of my VHI policy but I was then taxed nearly €300 extra. Is this normal? There doesn't seem to be much of an advantage there.

Can I reclaim back this tax?

Of course not

They paid health insurance on your behalf
You pay BIK on this
That’s the rules

You had an active health insurance plan for the benefit of them paying the full cost

You can’t turn around and ask for tax back because your unhappy with it ,

you had health insurance cover

That’s the benefit

Just cancel the plan and save yourself tax going forward

wally1990

In addition they are paying your health insurance

Example if you did yourself
Basic figures for this
Just say annual income €40,000
Take home pay after tax :€31500
Then you pay Your health insurance with TRS from your wages : eg €1,000 plan
New take home €30,500

Or employer pay it’s
€40000 annual income
BIK €1000
Taxable salary €41,000
Take home €31,000
Apply for tax credit
Take home €31,200

Your better off with the employer paying it on your behalf and you pay BIK otherwise to keep the same policy and pay it yourself will cost you more in your pocket

if you don’t want it at all , just get rid

But you can’t have an active plan and get tax back
That’s the best of both worlds

You can get a tax credit though OP