PRSA - BIK on employer contribution?

[matrix1]

Hi,

I have a standard PRSA and employee and employer the contributions are made on payroll before employee PAYE and employee PRSI
are deducted.

The company is chipping in the 10.75% employer PRSI to my pension that they would "save" by me having the pension paid via payroll. This is the extent of their contributuion.

Is this extra amount deemed BIK or not? I am under the age related limits for relief.

Looking at the ROS Form 11, it seem I may have to fill in the fields:

Taxable Benefits (not taxed at source under PAYE):

PRSAs [employers contrib]

and also

Personal Retirement Savings Accounts (PRSAs)

Only complete if you, or your employer on your behalf, made PRSA contributions. If you or your spouse availed of the Government Incentive for SSIA holders to invest some or all of your SSIA proceeds into a pension product, do not include those amounts in this Return.

(b) PRSA contributions deducted by your employer from your salary (for which no further relief is due) [employee (me!) contrib]

(c) PRSA contributions made on your behalf by your employer. Note to include this in the Taxable Benefits section of the PAYE/BIK/Pensions panel [employers contrib, also on BIK part above]

Somebody mentioned that once I was under the relief ceiling for my age group, I was not liable for BIK. I am not so sure...

Thanks!

 

[ClubMan]

Is this extra amount deemed BIK or not?

No. It's not BIK since it is cash. And it is tax free if it is going into the pension and you are under the relevant age related pension tax relief limit percentage of gross income.

Looking at the ROS Form 11, it seem I may have to fill in the fields:

Isn't Form 11 a self assessment return? If you are PAYE why are you returning this form rather than a Form 12?

 

[matrix1]

No. It's not BIK since it is cash. And it is tax free if it is going into the pension and you are under the relevant age related pension tax relief limit percentage of gross income.

That's what Revenue PAYE suggested. But I don't understand why Form 11 considers PRSA employer contributions as a Taxable Benefit? Maybe this is only filled in if you are over the age related limits? But if so, I'm not sure where to record the employer contribution (as small as it is!). Maybe I just fill in panel (b) below with the employee+employer contribution and leave the rest blank.

The PRSA section of "Charges & Deductions" in the 2007 Form 11 lists:

Personal Retirement Savings Accounts (PRSAs)
Only complete if you, or your employer on your behalf, made PRSA contributions. If you or your spouse availed of the Government Incentive for SSIA holders to invest some or all of your SSIA proceeds into a pension product, do not include those amounts in this Return.

(a) If you are a member of an Occupational or Statutory Pension scheme state the amount of contributions to that scheme from 1/1/2007 to 31/12/2007 (for which no further relief is due) €

(b) PRSA contributions deducted by your employer from your salary (for which no further relief is due) €

(c) PRSA contributions made on your behalf by your employer. Note to include this in the Taxable Benefits section of the PAYE/BIK/Pensions panel €

(d) PRSA contributions paid directly by you to a PRSA provider €

(e) Amount paid between 1/1/2008 and 31/10/2008 for which relief has not already been granted and for which relief is being claimed in 2007 €

(f) Amount paid in a prior year, for which relief has not been obtained €

(g) Total amount of PRSA relief claimed in 2007 €

​

If you are PAYE why are you returning this form rather than a Form 12?

Rabodirect investment gains etc. I have returned a Form 11 since I was a Sole Trader some time back. I also get to pay an extra Health Contrib on DIRT....

 

[ClubMan]

OK - thanks for explaining why you are returning a Form 11.

Actually, regardless of what I said above, employer contributions are technically a BIK but are normally exempt.

 

[matrix1]

The 2007 Form 11 helpsheet has actually cleared this up: [broken link removed]

"Contributions made by an employer to a PRSA on behalf of an employee are treated as a Benefit-in-Kind of the
employee and must also be returned in Line 218(a) of the Form 11, Line 218 of the Form 11E. Such
contributions are treated for relief purposes as if made by the employee.
The total amount to be entered at Line 508(g), is the sum of:
- the PRSA contribution paid by an employer on your behalf [Line 508(c)]. (Note to
also enter this figure at Line 218(a))
- the amount paid by you and certified on Form PRSA 1 (which you retain), see note below on
'PRSA 1 Certificate', [508(d)],
- any amount paid in a prior year for which relief has not been obtained, [508(e)],
- the amount paid between 1 January 2008 and 31 October 2008 for which relief is claimed for 2007 (and
for which relief has not already been allowed), [508(f)]."
​

so I enter the full employer contribution, and then this figure again to claim relief. This also goes in as BIK (but the age related relief cancels this out).

My employee contribution also goes in there, but I don't claim relief on that on Form 11 as it has already been done via PAYE payroll.