# tax credit for VHI



## consol (26 Jan 2009)

Hello...

the company I work for pay 100% for my VHI but I pay BIK tax, am I entitled to any extra tax credits for this arrangement?

Thanks


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## JJ1982 (26 Jan 2009)

Yes, you are entitled to a tax credit for this/ VHI (if you pay on your own) is given tax relief at source.Get onto the paye section in revenue (1890 222 425) and explain the situation  and you will have the tax credit allocated to you. Bear in mind, you can also go back 4 years if you have not previously claimed it.


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## vfillafan (15 Oct 2009)

How do I claim the tax back if I am unemployed and pay my own (and wifes) vhi?


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## Graham_07 (15 Oct 2009)

vfillafan said:


> How do I claim the tax back if I am unemployed and pay my own (and wifes) vhi?


 
If you pay your own medical insurance the tax relief is given at source. i.e. what you pay is 80% of the total, the VHI gives you the benefit of the tax relief already. Check your renewal notice and you'll see.


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## John Rambo (17 Oct 2009)

consol said:


> Hello...
> 
> the company I work for pay 100% for my VHI but I pay BIK tax, am I entitled to any extra tax credits for this arrangement?
> 
> Thanks


 
I don't think you are. The company are in receipt of the Tax Relief at Source ("TRS"). If you're paying BIK on the "net of TRS" amount then you are, in effect, in receipt of the TRS.


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## asdfg (17 Oct 2009)

I think you pay BIK on the gross (crazy but that's the way revenue insist on it being done) so therefore you are entitled to the tax credit which you usually get later in the year around Oct


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## Guest128 (17 Oct 2009)

John Rambo said:


> I don't think you are. The company are in receipt of the Tax Relief at Source ("TRS"). If you're paying BIK on the "net of TRS" amount then you are, in effect, in receipt of the TRS.



This is totally wrong. If your company pays 100% of your VHI then you can claim a medical insurance tax relief, which I have done. Its €143 euro for me.


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## John Rambo (17 Oct 2009)

FLANDERS` said:


> This is totally wrong. If your company pays 100% of your VHI then you can claim a medical insurance tax relief, which I have done. Its €143 euro for me.


 
Only if the company are applying BIK to the gross amount, e.g. your VHI "fee" is €100 but your employer (obviously) pays €80 (the net amount). If BIK is then applied to the €80 then you've already received the TRS. What actually happens is that BIK is applied to the €100 and the company repays the TRS when it files its corporation tax return for that period. The onus is on the individual to then claim the tax relief. This isn't always the case though.


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## Guest128 (17 Oct 2009)

This describes the most common case:

Example 1
The employer pays the full medical insurance
premium for an employee
The renewal notice to the employer shows the net
premium due - £1,600 (Gross Premium is £2,000)
Employer
The employer pays the insurance provider the net of tax
relief premium of £1,600. He/she pays the tax relief at
source (£400) attributable to the premium to the
Collector General. The employer operates PAYE/PRSI on
£2,000 notional pay to the employee.
Employee
As the employee has not benefited from the tax relief
arising on the medical insurance premium paid by the
employer, the employee is entitled to a tax credit of £400
(£2,000 at 20%) in his/her tax credit certificate.
Revenue
TRS Section in the Collector General’s Office pays over
the TRS of £400 to the medical insurance provider.

See http://www.revenue.ie/en/tax/it/leaflets/it1.html#section9


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## theresa1 (21 Oct 2009)

I just got six envelopes in the post from tax office (yes what a waste) with p21 for 2005,2006,2007 and 2008. The bottom line is that they have adjusted my medical ins relf in 2005 from 128.30 to 118.40 and for 2008 from 166.18 to 158.60. The 2006 and 2007 remained unchanged at 127.31 and 143.22 respectively. I now owe 17.48 which will come off 2010 tax credit. I am on VHI Plan B with no extra's and my company pay's 100% for VHI. Does this sound correct? I realise it's not much.


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## theresa1 (9 Nov 2009)

Anybody else experience getting six separate envelopes or similar rather than all correspondence in the one envelope from tax office?


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## Graham_07 (9 Nov 2009)

theresa1 said:


> Anybody else experience getting six separate envelopes or similar rather than all correspondence in the one envelope from tax office?


 
Each year or document is processed separately and while you got them at the same time they would not necessarily have exited the "production line" in that order. All issue, folding, enveloping is automated so I'm not aware that they have any way to know if more than one item is going to the same person.


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## theresa1 (9 Nov 2009)

My bank can send me my savings and current a/c statement in the one envelope just to give an example.


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## JJ1982 (11 Nov 2009)

theresa1 said:


> My bank can send me my savings and current a/c statement in the one envelope just to give an example.



In fairness the bank would have a lot less post the the Revenue Commissioners and be able to control it easier.


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## plant43 (11 Nov 2009)

theresa1 said:


> My bank can send me my savings and current a/c statement in the one envelope just to give an example.



If it annoys you that much, why don't you sign up for online services and you'll never get an envelope from revenue again.


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## theresa1 (7 Jul 2010)

- Can anybody explain this? I have just been asked by vhi to provide my PPS NO - i've no problem with this. My company group scheme pay's sub in full. The part I dont understand is what happpen's when I get to 50 -am i taxed more? Do I pay less?


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## NovaFlare77 (7 Jul 2010)

Long story short, the net cost to those over 50 won't change, and they'll pay the same net cost as those unver 50. 

The "gross" (i.e. before tax reliefs or group rates) cost of health insurance for over 50s has technically increased, but this increase is equal to the increased tax relief someone over 50 also gets, so overall there should be no difference.

The increased tax releifs were introduced last year as a temporary alternative to risk equalisation of health insurance costs.

What I don't know is the mechanics of how it works in company paid schemes. It depends on what figure the insurer has supplied to the employer as the gross premium, i.e. is it the gross figure before ANY tax relief, or has the insurer already reduced it by the age related credit. Worst case scenario is that someone over 50 is fully taxed as a BIK, but they then claim tax relief, including the age related credits, back from Revenue.

Like I say, this is that this is supposed to be a temporary measure and is scheduled to be changed in 2013.


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## theresa1 (8 Jul 2010)

Thank's I think I get it but once again we really love making thing's complicated in this Country and you really have to check your payslip. A work colleague of mine over 50 had his pay reduced -maybe as you say he need's to get on to Revenue and hopefully get somebody that know's how all this work's.


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