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Vouchers and BIK

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  • 31-10-2005 9:41am
    #1
    voodoo
    Registered Users Posts: 785 ✭✭✭


    Hi all,

    Wonder if anyone can advise on something for me! I work in sales and one of the vendors whose products we sell, had a promotion on for the last 6 months! If you sold their product, you were entitled to some vouchers! Now, being a good sales guy :) I built up a nice little sum - almost €2000 in voichers... My question is, am I subject to BIK on these vouchers, even though they weren't given by my employer?

    If anyone has any thoughts, I would appreciate it.

    Cheers,

    Voodoo


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    #2
    ck1
    Registered Users Posts: 123 ✭✭ck1


    In the case where the vouchers were passed to you by your employer, i.e the supplier gave the vouchers to your employer for him to pass to the staff, your employer should be operating BIK. Effectively what you have received is a "perquisite" in connection with your office of employment. This could be argued with the Revenue as your employer may state that it is up to you to declare to the Revenue but take the example of a bar tender receiving tips, if this are passed through the employer, then the employer must operate BIK on the notional value, specific example given by the Revenue.

    If you received them direct from the supplier, which would be quite unusual, you would be required to declare these to the Revenue and pay the appropriate Tax and PRSI.


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    #3
    voodoo
    Registered Users Posts: 785 ✭✭✭voodoo


    Hi Ck1,

    In this instance, the vouchers were sent to my workplace, but with all my details on them! They were never as such passed to my employer! I just want to ensure that it I am liable, that I cover it and if I am not liable, that everything is ok.

    Chers,

    Voodoo


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    #4
    Victor
    Registered Users Posts: 78,371 ✭✭✭✭Victor


    ck1 wrote:
    If you received them direct from the supplier,
    If this is the case, both the employer and the Revenue would be very interested.


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    #5
    ck1
    Registered Users Posts: 123 ✭✭ck1


    Hi Voodoo, well regardless as to how the benefit is appplied, you are liable to PAYE and PRSI.

    How did the supplier know how many vouchers were attributed to you as opposed to any other member of staff?


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    #6
    voodoo
    Registered Users Posts: 785 ✭✭✭voodoo


    Victor...Hmmm thought as much! I need to look into it a little then...

    CK1, with regards to how they distinguish, each sales guy, submits their relevant sales to the vendor through their website and the vendor then knows how much to allocate to each sales person...


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    #7
    ck1
    Registered Users Posts: 123 ✭✭ck1


    So effectively the supplier are paying you direct. Mmmmmm.... very interesting. I would ask them how they are returning this to the Revenue Commissioners.

    Remember here that annually, companies are required to complete a Form 46G which details 3rd party payment for services and commissions however these are for payment over €3,800 (i think) so is this a way of them avoiding filling in this. If they paid the vouchers to your company for further distribution the amount would probably exceed the €3,800. All sounds very odd.

    Additionally employers are also required to complete Form P11D which details benefits paid but with no BIK operated. Question here is, is your employer required to put these down as they are not been paid directly through him .

    Yours is not the only papertrail here!!!


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    #8
    NaasMan
    Closed Accounts Posts: 24 ✭NaasMan


    Hi Voodoo, the simple answer here is that the vouchers are taxable and you should return them on your tax return. The Revenue class them as "Third Party Benefits" in their tax briefings publication of December 2004. From memory, Revenue had suggested in the past that the company giving the voucher should operate PAYE/PRSI on the vouchers, however, they have argued that they can not do so, due to the fact that they are not paying cash to deduct the PAYE/PRSI from.


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    #9
    ck1
    Registered Users Posts: 123 ✭✭ck1


    Thanks NaasMan for the Tax Briefing reference.

    Anyway, thought I would have a look at the Revenue opinion on this in this Tax Briefing and as it states you are liable to Tax however it clearly states that such vouchers are taxable under Section 112 of the TCA 1997 which covers Schedule E earnings therefore what there are saying is that the vouchers are taxable as a BIK by your employer and not under self assessment.


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    #10
    voodoo
    Registered Users Posts: 785 ✭✭✭voodoo


    Hi all,

    Thanks for your feedback on this! I have checked this out with the 3rd party involved and they have informed me that they take care of the BIK costs... I am still not 100% confident that I am in the clear however... It will be a situation that I am going to build up almost €3000 with them in vouchers since the start of the year and I really need to find out how this will affect me and if the 3rd party are paying the BIK, whether I paye PRSI on these also.

    Regards,

    Voodoo


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    #11
    ck1
    Registered Users Posts: 123 ✭✭ck1


    It would be very unusual whereby the 3rd party accounted for the BIk unless they got special dispensation from Revenue. Pre the new BIK rules employers could account for this but this was only generally given whereby the Benefit was given to their own employees. Under the new rules the employer cannot really discharge their obligation but application can be sought. If the third party are claiming that they have covered the liability I would request this from them in writing. However, your employer should have requested this as it really is his responsibility under the new rules.

    Question is here how do they know what BIK to charge as they do not know your tax position and your chargeble rate.

    In anyway, under the new BIK rules if it was the case in this instance whereby your own employer had to account for it he must collect it by the end of the tax year. If not, and it is not collected within the first three months of the following year, he must apply BIK to the BIk.


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    #12
    RainyDay
    Closed Accounts Posts: 6,925 ✭✭✭RainyDay


    voodoo wrote:
    I have checked this out with the 3rd party involved and they have informed me that they take care of the BIK costs... I am still not 100% confident that I am in the clear however
    They're telling you what you want to hear. How did they do this? Did they make payments to Revenue on your behalf? Did you give them your PPS number to facilitate this.

    This is bull. They are trying to put you off.


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    #13
    NaasMan
    Closed Accounts Posts: 24 ✭NaasMan


    voodoo wrote:
    Hi all,

    Thanks for your feedback on this! I have checked this out with the 3rd party involved and they have informed me that they take care of the BIK costs... I am still not 100% confident that I am in the clear however... It will be a situation that I am going to build up almost €3000 with them in vouchers since the start of the year and I really need to find out how this will affect me and if the 3rd party are paying the BIK, whether I paye PRSI on these also.

    Regards,

    Voodoo

    If they are taking care of the tax on the BIK, they may have set you up on their payroll as a employee. The easy way to check this is to ask them to give you a copy of your P60 showing the tax and PRSI has been paid.


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