# Online Medical Insurance Tax Relief



## peno (24 Jan 2008)

I've just been on the revenue online trying to correct my tax credits for 2007.

I have some medical expense which I entered under health expenses. Ok so far.

But where does the VHI paid for by my emplyer go? Is it under health expenses as well as is it under another category that I can't find?

Anyone done this lately?


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## ClubMan (24 Jan 2008)

peno said:


> But where does the VHI paid for by my emplyer go? Is it under health expenses as well as is it under another category that I can't find?


No - there should be a separate category but I don't have access to my account at the moment to check. I presume you already know about this (e.g. grossing up the net premium on your payslip and claiming the tax credit)?

[broken link removed]


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## GA001 (24 Jan 2008)

ClubMan said:


> No - there should be a separate category but I don't have access to my account at the moment to check. I presume you already know about this (e.g. grossing up the net premium on your payslip and claiming the tax credit)?
> 
> [broken link removed]


 
TBH, I am slightly confused, my employer pays all but something like €12.00 over the course of the year of my VHI payment - am I entitled to receive any tax credit / relief ?

Slightly confused on the wording(s)


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## ClubMan (24 Jan 2008)

GA001 said:


> TBH, I am slightly confused, my employer pays all but something like €12.00 over the course of the year of my VHI payment - am I entitled to receive any tax credit / relief ?


Yes:

[broken link removed]


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## leex (24 Jan 2008)

I was on ROS last night also to claim VHI paid by my employer but I couldn't see the option for Medical Insurance credit. I could swear I claimed this online last year.

All VHI paid by your employer and yourself is claimable at lower tax rate.


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## ClubMan (24 Jan 2008)

leex said:


> All VHI paid by your employer and yourself is claimable at lower tax rate.


Just to be clear - the *gross *premium equivalent for the net premium actually paid by the employer is what you claim relief on. For example if the employer pays €80 p.m. (and charges _BIK _on this as required to do) then the annual net premium is 12 x €80 = €960 but the gross premium is €1,200 and this is the figure on which you calculate your 20% relief.


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## GA001 (24 Jan 2008)

ClubMan said:


> Just to be clear - the *gross *premium equivalent for the net premium actually paid by the employer is what you claim relief on. For example if the employer pays €80 p.m. (and charges _BIK _on this as required to do) then the annual net premium is 12 x €80 = €960 but the gross premium is €1,200 and this is the figure on which you calculate your 20% relief.


 
How does this work in respect of back-dating ?

My employer has been paying my VHI for the past 3 years (I was previously and obviously unaware of this)

What effect(s) will this have on my levels of income, tax- relief back-dated ?

*VHI has been approx €700 for the past 3 years (annually) my employer pays €688 and I pay the remainder.

Apologies for the ignorance on the subject.

*Of course I am not sure of the exact discounted amount that my employer may be paying me for.


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## ClubMan (24 Jan 2008)

GA001 said:


> My employer has been paying my VHI for the past 3 years (I was previously and obviously unaware of this)


How come? The _BIK _and concomitant tax and _PRSI_/health contribution deductions should have been on your payslip if the employer was processing this correctly.


> What effect(s) will this have on my levels of income, tax- relief back-dated ?


You can backdate claims for the 20% tax relief on the relevant gross premium paid for the relevant years.


> *Of course I am not sure of the exact discounted amount that my employer may be paying me for.


You should be - if your employer was paying the full premium as a _BIK _then the full net annual premium (ignoring intra year premium hikes) should be 12 times whatever is listed on your monthly payslip under medical insurance premium _BIK_.  The gross premium is then 10/8ths of this. Where the employer does not pay 100% of the premium then you adjust the figures appropriately.


You should be - it's 10/8ths of whatever appears on your payslip as medical insurance premium BIK if they are paying the full amount.


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## GA001 (24 Jan 2008)

ClubMan said:


> How come? The _BIK _and concomitant tax and _PRSI_/health contribution deductions should have been on your payslip if the employer was processing this correctly.
> 
> You can backdate claims for the 20% tax relief on the relevant gross premium paid for the relevant years.
> 
> ...


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## Black Sheep (24 Jan 2008)

Hi clubman you have me confused. Why do you gross up the VHI payment (BIK) made by the employer. It's already gross.


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## ClubMan (24 Jan 2008)

It shouldn't be gross on your payslip! See the _Revenue FAQ _links that I posted already.

I'm in the same position myself except that the employer pays the full premium. The payslip has the monthly premium net of the 20% relief that the employer gets and I am charged _BIK _tax/_PRSI _on that. I then get the gross annual premium from my _VHI _invoice or by calculating as above and then get a credit based on 20% of that.  This is the way that the _VHI _told us to do it and it tallies with the information in the _Revenue _links above. If your employer is not putting the net premium through payroll as a _BIK _as you seem to suggest (at least for previous years) above then they are doing things wrong!


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## Clarkey (24 Jan 2008)

ClubMan said:


> It shouldn't be gross on your payslip! See the _Revenue FAQ _links that I posted already.


 
You are wrong on this one Clubman. You pay tax and PRSI on the full value of the benefit. It should be gross on your payslip.

Where the employer pays the full premium for employees and the employee does not make good any amount to the employer, PAYE and PRSI must be applied to the *gross (pre Tax Relief at Source) premium*. To ensure that the employee is granted the relief afforded by TRS, the employee will be given a tax credit (at the standard rate) for the gross premium in his or her certificate of tax credits


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## ClubMan (24 Jan 2008)

OK - I must check my payslip again!

Apologies for the misleading info.


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## peno (24 Jan 2008)

Agree with Clarkey.

The full gross amount is shown on my payslip.

On a form from VHI I see the gross amount which agress with payslip and also the net amount taking into account the 20%.


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## ClubMan (24 Jan 2008)

ClubMan said:


> OK - I must check my payslip again!


Just checked - the payslip indeed has the gross monthly amount! Sorry. I was getting confused with some other aspect of the whole thing...


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## Johnboy45 (24 Jan 2008)

To claim your VHI relief you have to write to Revenue with the information.  i'm just in the process of doing this at the moment and phoned Revenue as I couldn't figure out either where the VHI BIK went.  It used to be on the web site but Revenue took it off as everyone was claiming it!!!!


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## leex (25 Jan 2008)

Thanks JohnnBoy - answers my query also.


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## Black Sheep (25 Jan 2008)

As I understand it the tax relief is available to employee on the gross which should appear on the payslip. It's the employee who receives the tax relief. Tax relief on VHI paid on behalf of employees is not available to employers.

I read somewhere (if only I could find it) that as and from 2007 tax relief on VHI as BIK would automatically be given.


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## Clarkey (25 Jan 2008)

[broken link removed]

Is this what you are referring to?


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## Black Sheep (25 Jan 2008)

Don't think so


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## ClubMan (25 Jan 2008)

Black Sheep said:


> As I understand it the tax relief is available to employee on the gross which should appear on the payslip. It's the employee who receives the tax relief. Tax relief on VHI paid on behalf of employees is not available to employers.


In spite of some of my earlier incorrect ramblings I believe that you are correct here.


> I read somewhere (if only I could find it) that as and from 2007 tax relief on VHI as BIK would automatically be given.


I heard this but that it applied from this year.


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## Clarkey (28 Jan 2008)

Black Sheep said:


> Don't think so


 
*1.2 BIK Medical Insurance credit
Tax relief on medical insurance is granted at source on all premiums. Where an employer pays medical insurance as a benefit-In-kind [BIK], the employer pays the lower premium and repays the tax credit to Revenue through the Corporation Tax return/payment. The employee, whose medical insurance has been paid by the employer, must then claim the tax credit individually. To encourage employees who are taxed on the BIK to claim the appropriate tax credit, the P35 form for 2007 will include a new field to allow employers to notify Revenue of the amount of medical insurance paid as a BIK. Revenue will process this information and grant the appropriate tax credit to the individual employee in 2008*

Taken from link already posted


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