Tax relief on health insurance paid by company

A

AlAndalus

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I believe that where your company pays your health insurance premiums for you (and you pay BIK on this), you are entiled to claim tax relief on some of what you have paid. In my case the company paid just under 2.5k and the gross/BIK amount is just over 3k, can anyone tell me what I can claim back from the tax man, in addition to any other medical expenses part or all of which I paid for myself.
 
Revenue have a good overview here:
http://www.revenue.ie/en/tax/it/leaflets/it5.html

It is a separate item to MED1 Health Expenses for things like GP visits and prescriptions and shows up I think as Medical Insurance Relief on your payslip.

Was the 3k just for your policy or are there multiple 'lives' covered? This is important as there are limits for person that you can claim for.

For medical insurance policies renewed or entered into on or after 16 October 2013 the tax relief per person covered by a policy will be limited to:
  • In the case of each adult on the policy, the lesser of the premium paid or €1,000, and
  • In the case of each child, the lesser of the premium paid in respect of that child, or €500.
 
You're probably looking at €500 tax relief then (20% of 1000x2 and 20% of 500). Just double check you don't currently have a Medical Insurance relief on your payslip. Sometimes the company have already sorted the relief out for you.
Think you can claim for previous years as well if you are only now aware of the relief and the company have been paying it.
 
So I've been told by our payroll people that tax relief is applied at source with the VHI and the company pay the net amount. Does this mean I'm not entiltled to claim relief on the BIK I've paid in tax?
 
I think that's Example #2 on the Revenue site, so you should still claim your relief on the BIK.
 
AlAndalus said:
So I've been told by our payroll people that tax relief is applied at source with the VHI and the company pay the net amount. Does this mean I'm not entiltled to claim relief on the BIK I've paid in tax?
Click to expand...

What is SUPPOSED to happen is that you have the Gross Premium (say €3,000) and then you also have the Tax Relief (say €600)

The employer should pay VHI the net figure of €2,400 and ALSO pay the Collector General the €600 tax relief.

Then the employee is charged BIK on the €3,000 figure and also gets an extra tax credit for the €600

As far as I am aware, any other way of doing it is incorrect

In your situation you are entitled to the tax credit so ring up Revenue and explain that your employer pays your VHI and that you want the extra tax credit. As a matter of courtesy I would tell your payroll people that they are supposed to be paying the tax relief over to the VHI.

See example 2 of odyssey6's link above

In my experience the vast majority of companies/employers don't do this properly at all. In most cases I've come across, the employer pays the net figure to the VHI, charges BIK on the employee on this net figure (or sometimes the gross figure) and doesn't pay the tax relief to the Collector General at all. This is probably what is happening here
 
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