Benefit in Kind on Health insurance

My wife's employer has just decided they will pay for health insurance up to the tune of €844 with a particular provider.

I have her tax credits and I have always paid for the family's own health insurance out of my own pocket (2 adults, a 3 year old) and would welcome any reduction in that!

But how much BIK does she have to pay on the employers contribution? Because inevitably I will need to fund this shortfall back to her.

Probably an easy question but tax and credits is my blind spot!

Her HR depart some be able to answer..but just to let you know, you'll now have to chase/arrange the tax credit (which til now was from source) directly with revenue. It would be €200 (ie 20% of €1000).

See http://www.revenue.ie/en/tax/it/leaflets/it5.html

S.

yeah I know they would but they like to take their time and i like to budget.

God this all sound very complicated. It sounds like i end up paying more and then have to claim it back!!

Or should I just let her take out a plan in her own name with her employer and have them pay that. And then continue with my own cover for me and the kids thereby not having to claw back the tax relief myself?

I'm just one of those people who likes to have all these things all together for admin purposes.

- Say the premium is €1,000

- The employer pays €800 (technical point)

- It then repays the €200 of tax relief it shouldn't have got (technical point)

- Your wife pays tax of (say) €520 on the BIK of €1,000.

- Your wife is entitled to a credit of €200 which she can ask to be coded into her tax credits cert and get through payroll.

- If there's a tax return also being submitted, it needs to be reflected correctly to ensure that the relief if retained / obtained.

- Tax relief is capped at €200 for an adult, so any amount over €1,000 doesn't qualify for relief.

Gotcha! Thanks Gordon.

okay someone is going to have to tell me how to action this because I find those revenue leaflets confusing!

As of October 1st, my wifes employer is going to be contributing €844 to a health insurance plan of her choosing. So we are routing all our family through that plan though they will only cover hers and deduct the cost of the others from her salary.

I have her tax credits as I earn more.

Do i now have to go about claiming the tax credit back on revenue.ie? and how much should it before.

I'm feeling rather stupid at the moment . Generally I run the houses finance and I dont like losing control of things and them going through her work as I cant ask the necessary questions. And she has no idea.

Here's the link to the pdf-form

download, complete and return to revenue...

S.

Thanks Suzie

So I can't claim until the end of the tax year?

No

Submit the form and revenue will adjust the credits accordingly...

S.