Revenue Notice: P35 2014 Issues re BIK on Medical Insurance
P35 2014 – Revenue have issued a notice concerning P35 2014 returns
Incorrect Medical Insurance information recorded on 2014 Form P35L
This notice is solely for the attention of employers who pay medical insurance on behalf of their employees as a Benefit in Kind (BIK). It does not affect returns being made where the employer is simply facilitating deductions from an employee’s pay for medical insurance. The filing date for the 2014 P35 is 15th February 2015. In the case of ROS filers this date is extended until 23rd February.
It has come to Revenue’s attention that some employers who pay medical insurance on behalf of their employees have submitted P35Ls for 2014 with incorrect information. In a small number of cases identified, employers have incorrectly recorded the value of the actual tax relief due for the medical insurance premium paid by the employer instead of the amount of Medical Insurance that is eligible for tax relief in the box provided.
By way of examples; An employer pays a gross Medical Insurance premium of €3,600 (amount charged by the medical insurance provider). The amount of Medical Insurance eligible for tax relief paid by the employer is as follows: One adult = €1,000. This is the amount that should be shown on the P35L and not €200 (€1,000 x 20% = €200 actual tax relief due). Two adults = €2,000. This is the amount that should be shown on the P35L and not €400 (€2,000 x 20% = €400 actual tax relief due). Two adults + one child = €2,500. This is the amount that should be shown on the P35L and not €500 (€2,500 x 20% = €500 actual tax relief due).
Failure to update the P35L Medical Insurance details correctly will result in incorrect Employee Tax Credit Certificates for 2015 being issued. Where an employer has provided the incorrect information an amended P35L needs to be filed. The amended P35L must include all the information previously submitted e.g. pay/tax/USC/LPT (where applicable) along with the corrected medical insurance details. Once the amended P35L is processed by Revenue, the employee’s tax records for 2014 and 2015 will be automatically corrected and an amended Tax Credit Certificate for 2015 will automatically issue.