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  • FIRST POST
    • onlyroz
    • By onlyroz 10th Sep 17, 3:27 PM
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    onlyroz
    Self assessment question
    • #1
    • 10th Sep 17, 3:27 PM
    Self assessment question 10th Sep 17 at 3:27 PM
    I am trying to fill out my self assessment tax return because I earned slightly above the £50k threshold for repaying child benefit.

    I have entered the taxable pay and tax deductions information from my P60. I am unsure, however, whether I need to include details of my private medical insurance. As far as I was aware the tax due on this should already be accounted for in the tax deductions shown on my P60. However, if I add in the medical insurance (around £1500 a year) to the relevant sections of the self-assessment form the amount of tax due jumps from around £20 to around £900 .

    So do I include it or not?
Page 1
    • Pennywise
    • By Pennywise 10th Sep 17, 3:34 PM
    • 9,339 Posts
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    Pennywise
    • #2
    • 10th Sep 17, 3:34 PM
    • #2
    • 10th Sep 17, 3:34 PM
    You do include it - it's added to income. You need to use the same figure as per the p11d provided by your employer.
    • onlyroz
    • By onlyroz 10th Sep 17, 3:36 PM
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    onlyroz
    • #3
    • 10th Sep 17, 3:36 PM
    • #3
    • 10th Sep 17, 3:36 PM
    You do include it - it's added to income. You need to use the same figure as per the p11d provided by your employer.
    Originally posted by Pennywise
    I haven't got the P11D yet but I can figure out the amount by adding up the monthly payments on my regular pay slips. So does this mean that the tax due on the medical insurance *isn't* automatically deducted via PAYE? And if not, why not?
    • onlyroz
    • By onlyroz 10th Sep 17, 3:52 PM
    • 13,597 Posts
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    onlyroz
    • #4
    • 10th Sep 17, 3:52 PM
    • #4
    • 10th Sep 17, 3:52 PM
    I can see from my pay slips that I have indeed already paid tax on the medical insurance - and so I cannot see why I need to add it to the self assessment forms. If I do this then I would end up paying tax on this twice - how can this be right?
    • uknick
    • By uknick 10th Sep 17, 4:06 PM
    • 709 Posts
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    uknick
    • #5
    • 10th Sep 17, 4:06 PM
    • #5
    • 10th Sep 17, 4:06 PM
    Don't you add it, let the system work out total tax due for the year, then it deducts what you've already paid under PAYE to arrive at a final figure you owe/are owed?
    • Dazed and confused
    • By Dazed and confused 10th Sep 17, 4:10 PM
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    Dazed and confused
    • #6
    • 10th Sep 17, 4:10 PM
    • #6
    • 10th Sep 17, 4:10 PM
    There could be lots of explanations.

    At the end of the day your tax code is only used to try and collect the correct tax during the year so if you had say £500 medical benefit in your tax code but the actual benefit was £1,500 you will almost certainly have extra tax to pay once the final figures are known.

    Or were your benefits payrolled, which is a different kettle of fish.
    • Dazed and confused
    • By Dazed and confused 10th Sep 17, 4:19 PM
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    Dazed and confused
    • #7
    • 10th Sep 17, 4:19 PM
    • #7
    • 10th Sep 17, 4:19 PM
    Tax return notes (employment page)
    for 2016:17 has the following advice,

    Benefits from your employment
    If your employer has ‘payrolled’ your benefits and expenses (this means the tax was deducted from your pay and included in your P60) don’t include them in boxes 9 to 20.
    If not, your employer must give you details of your benefits and expenses on a form P11D, ‘Expenses and benefits’. Put the details from your P11D in boxes 9 to 20. Each box number on form P11D corresponds to the same box number in this section
    • badmemory
    • By badmemory 10th Sep 17, 4:23 PM
    • 953 Posts
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    badmemory
    • #8
    • 10th Sep 17, 4:23 PM
    • #8
    • 10th Sep 17, 4:23 PM
    I would wait for your P11D. Self assessment works things quite differently from PAYE. PAYE uses a tax code which should take into consideration any benefits in kind from your employer.

    Self assessment takes your pay and adds on the benefits in kind & then deducts the normal personal allowance & you pay tax on that. In a perfect world there would be no difference. However, they tend to use the previous years actual medical insurance cost whereas it is most likely to increase, but certainly should not cause a £900 shortfall.

    This could be caused by high earnings or child benefit reclaim or something else.
    • onlyroz
    • By onlyroz 10th Sep 17, 4:40 PM
    • 13,597 Posts
    • 25,870 Thanks
    onlyroz
    • #9
    • 10th Sep 17, 4:40 PM
    • #9
    • 10th Sep 17, 4:40 PM
    I would wait for your P11D. Self assessment works things quite differently from PAYE. PAYE uses a tax code which should take into consideration any benefits in kind from your employer.

    Self assessment takes your pay and adds on the benefits in kind & then deducts the normal personal allowance & you pay tax on that. In a perfect world there would be no difference. However, they tend to use the previous years actual medical insurance cost whereas it is most likely to increase, but certainly should not cause a £900 shortfall.

    This could be caused by high earnings or child benefit reclaim or something else.
    Originally posted by badmemory
    My employer used to do as above, where I would get a tax code derived from an estimate of the previous year's medical insurance. This changed last year, though, where I have been given the standard 1100L tax code but the medical insurance is explicitly stated on my pay slip and they directly calculate the tax owed each month.
    • onlyroz
    • By onlyroz 10th Sep 17, 4:40 PM
    • 13,597 Posts
    • 25,870 Thanks
    onlyroz
    Tax return notes (employment page)
    for 2016:17 has the following advice,

    Benefits from your employment
    If your employer has ‘payrolled’ your benefits and expenses (this means the tax was deducted from your pay and included in your P60) don’t include them in boxes 9 to 20.
    If not, your employer must give you details of your benefits and expenses on a form P11D, ‘Expenses and benefits’. Put the details from your P11D in boxes 9 to 20. Each box number on form P11D corresponds to the same box number in this section
    Originally posted by Dazed and confused
    Thanks. From this it seems like I don't have to include it - my medical insurance is explicitly stated on my pay slip, and the income tax due is calculated with this added to my salary.
    • MichelleUK
    • By MichelleUK 10th Sep 17, 4:57 PM
    • 323 Posts
    • 199 Thanks
    MichelleUK
    I haven't got the P11D yet but I can figure out the amount by adding up the monthly payments on my regular pay slips. So does this mean that the tax due on the medical insurance *isn't* automatically deducted via PAYE? And if not, why not?
    Originally posted by onlyroz
    It sounds as if your medical benefit is already being payrolled, as it shows on your monthly payslip and you have not received a P11D (which you should have by now if one is due). In this case, only the P60 figures should be included as you have already paid the tax through your pay.

    Other companies do not do this, and just declare the full benefit on a P11D annually, HMRC adjust your tax code and then recover the tax that way. I think that Pennywise has assumed that your company uses this method.

    Edit: Apologies, I wrote this earlier, before many replies, but have only just posted it!
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