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Critical Updates, Issue 71, May 2015
Road fuel scale charges from 1 May 2015
The VAT road fuel scale charges are amended with effect from 1 May 2015. Businesses must use the new scales from the start of the next prescribed VAT accounting period beginning on or after 1 May 2015.
Medical insurance premiums paid by employer
Where an employer pays medical insurance premiums on behalf of an employee and/or his or her dependents, a benefit in kind charge arises. PAYE, PRSI and Universal Social Charge (USC) must be deducted by the employer in respect of the value of the benefit provided.
The employee has not benefitted from the tax relief arising on the medical insurance premium paid by the employer as the gross premium is used to calculate the notional pay and he or she is entitled to tax relief in his or her tax credit certificate (TCC).
There is a limit on the amount of tax relief available on medical insurance premiums for policies renewed, or entered into, on or after 16 October 2013. Medical insurance providers calculate the amount of medical insurance eligible for tax relief paid by the employer based on the number of adults and children covered by the policy and advise employers of the relevant figures.
From 1 May 2015 Revenue has agreed to operate the changes on an administrative basis pending the provision of the underpinning legislation as part of the next Finance Bill.
For policies renewed, or entered into, on or after 1 May 2015, the full maximum amount of €1,000, or the relevant premium where this is lower, applies for all individuals aged 21 and over. (A person under 21 years of age availing of a reduced premium rate below the full adult price continues to be entitled to the maximum amount of €500, or the relevant premium where it is lower).
When calculating the tax relief applicable to policies renewed, or entered into, on or after 1 May 2015, medical insurance providers will factor in this change.