Vouchers and Tax Implications

[InfoSeeker]

I received 1000 euro of vouchers recently as a bonus for the year and this was given to all 60 employees within the company I work for. I am a standard PAYE worker and was wondering if I have any tax obligation re this. There was no reference to this in my wage slip for the month that I received the vouchers.

 

[ClubMan]

You are most likely liable for tax and PRSI on the benefit in kind attributable to these vouchers (possibly less the first €100 under the "small benefits exemption" clause). See [broken link removed].

 

[Capall]

You should check with your employer. If they pay bonuses without deducting paye then the Revenue can go after them for the unpaid PAYE. It is there responsibility as employers to deduct the PAYE.

 

[ClubMan]

But isn't it the case that if they don't deduct tax and PRSI then the employee/recipient is ultimately responsible to declare the income/BIK and discharge the liabilities?

 

[Capall]

The main liability rest with the employer. The PAYE Regulations allows the Revenue to pursue the employee for the unpaid tax if
1)The employee knew the employer had willfully failed to deduct PAYE

The employee can never be held liable for undeducted PRSI according to the regulations.

PAYE/PRSI should be deducted by the employer on all BIKs.
If they don't ,then I don't think that makes you subject to self assessment for the yeAR. That is just my opinion.

 

[ClubMan]

PAYE/PRSI should be deducted by the employer on all BIKs. If they don't ,then I don't think that makes you subject to self assessment for the yeAR. That is just my opinion.

I received BIK in the form of stock options exercised at a price discounted to the market value a few years ago. My employer did not deduct any income tax or PRSI in respect of these and Revenue eventually chased me up to settle the tax liability which was collected through deductions to my tax free allowamces (as they were then). Is this not an example of where Revenue will chase the employee/recipient for tax (whatever about PRSI) on BIK?

 

[Capall]

Stock options are subject to detailed provisions in the tax legislation. The employer cannot obviously deduct PAYE on these at time of grant.

 

[ClubMan]

Thanks Capall. I didn't realise that stock options were not comparable in this context. However a similar situation also arose before with private health insurance payments on which the employer did not deduct tax/PRSI and they chased up the employees directly to settle. So one way or another it seems to me that the employee is ultimately responsible for the tax/PRSI liabilities even if the employer didn't deduct them?