VHI as an expense for self-employed?

[ButtermilkJa]

Can a self-employed person claim VHI as a monthly expense before tax, similar to a PAYE worker getting his/her VHI deducted before their salary is taxed?

 

[ClubMan]

similar to a PAYE worker getting his/her VHI deducted before their salary is taxed?

Surely this is wrong? That sort of treatment applies to pension contribitions but not to private health insurance premiums as far as I know. Where an employee pays his/her own premiums then s/he pays them out of net income and gets a standard rated tax credit at source from the insurer. Where the employer pays the premiums on the employees behalf as a BIK then the employer must deduct tax and PRSI on the BIK through payroll and the employee must claim the standard rated tax credit on the premiums manually from Revenue. The approach described above would mean that employees could get full tax and PRSI relief on the gross insurance premium (or net of tax relief at source)!

 

[ButtermilkJa]

Ah, ok. Maybe I got that wrong then.

My last employer used to take mine out of my salary every month and I could've sworn he said it was taken out before tax. It definitely wasn't any kind of BIK anyway.

Thanks for the reply. Sorts that one out anyway

 

[ClubMan]

I could've sworn he said it was taken out before tax.

If this was the case then it sounds dodgy to me.

It definitely wasn't any kind of BIK anyway.

It's only in the last few years that the employer became responsible for deduction of BIK income tax/PRSI via payroll. Before that it was the employee's responsibility to declare any discharge any BIK liabilities.

Thanks for the reply. Sorts that one out anyway

Double check it with a professional because I'm not one although I think I'm correct here.

 

[ButtermilkJa]

No worries, I'll double-check with my accountant next time I'm having a chat. Thanks!