Child Tax Credits.

PepJr

Hi all,
I'm filling out the Child tax credits form for the first time. Bit stuck on section 5.4, “Benefits in kind from your employer”. I have to tell them the value of these. The two benefits I think that could be relevant are medical insurance (dental cover) and a company car.
It says I can get the details of these from my employer on the p11d form. My employer says I don’t have a p11d and that I don’t have to declare them because they are ‘taxed at source’. Is that right? The form says if I don’t have a p11d, to ask about the cash equivalent of my benefits in kind. ‘Usually your employer will give you the details you need on a form P11D or P9D. If you haven't got one, ask your employer about the cash equivalent of your benefits in kind.’

Any advice appreciated.

Thanks, Pep

DreamerV

You do not need to declare the medical insurance, but you must include the gross (before tax is taken off) amount of the company car....the cash equivalent of it. Your payroll dept should know how much it was.

Dibbothe3rd

They are right it is taxed at source, well kind of. Usually the Benefits are taken into account on your tax code so that you pay the correct amount of tax on the benefit at the appropriate tax rate. ie 20%

you can work this out backwards if you have your tax code to hand, but the figures in the tax code will reflect the previous years benefit as they assume it wont change, now this is unless your employer or you have notified them of a change in the current year.

The P11d form isnt completed until after 5th April each year so to ask you to get a P11d form now is a bit out of order.

You employer should at least be able to tell you what the benefit amount is, but usually they will hand this sort of thing to their accountant as car benefit is a bit tricky depending on the co2 emissions etc...Medical is easy as its just the total of the premium being paid for you. Problem is if they ask accountant for this info, they will probably be charged for it.

Another possibility is they include it on your Payslip so that tax is deducted each month. They should detail this separately on the payslip and the benefit will not show in your tax code as mentioned above.

Otherwise if you have had a P11d in for the tax year to 5th April 2009 then use that if you think it hasnt changed much.

Hope that helps and makes things a bit clearer.

DreamerV

Dibbothe3rd wrote: »

The P11d form isnt completed until after 5th April each year so to ask you to get a P11d form now is a bit out of order.

That comment is somewhat emotive. It is not out of order as they are asking for the P11d amount or P9d amount, and p60 amounts, etc for the previous tax year 08/09, which would have been received in April/May/June 2009. It is over 9 months since then, plenty of time to get these kind of forms in order, and they should still be to hand, as everything from HMRC is meant to be kept for several years.

OP, as said before, do not include medical benefits from your employer, these are not necessary for tax credits at all.

Dibbothe3rd

it wasn't stated what year was asked for. as you will see later in my post i do state to use previous year.

the problem is with tax credits, even if they ask for last years. it could be completely different in the current year so it could come back to bite them.

Especially with Car benefit as CO2 emission rates change which can effect the actual benefit. ok it might not be alot, but what happens of they changed cars in the current year and that vehicle had a different CO2 value? that could make a big difference.

so many variables to think about. My worry is why wont the employer give a P11d details or value at all. Even they should have this down on paper in their files.

The only suggestion I can think of is to either try and work it out backwards if the benefit is reflected in your tax code. Or look it up your self using the list value of the vehicle from say Parkers or even phone the local dealer for your car make and ask them for the taxable value for benefit in kind value.

DreamerV

Dibbothe3rd wrote: »

it wasn't stated what year was asked for. as you will see later in my post i do state to use previous year.

Exactly, it wasn't stated in the OP's post, yet you assumed it was an unreasonable request by tax credits. You mentioned to use the previous year's if it was similar...the OP has to use the previous year's figures whether similar or not. It seems on here the usual thing is to attack the system without having the facts. In this case, the facts are stated on the claim forms.

the problem is with tax credits, even if they ask for last years. it could be completely different in the current year so it could come back to bite them.

Not really. The last year's income is legally needed. Then an award notice comes out saying if the current year income goes over a certain amount or below a certain amount, to let the tax credit helpline know. If the income has gone up, if it hasn't gone up by an extra £25000, it has no bearing on that year's award at all. So neither does tax credits have to calculate an over or underpayment based on income. If the income goes down, again, the claimant has been prompted to tell them by the award notice....and the award is almost immediately recalculated, and the correct award amounts produced for the rest of the tax year. If the customer delays in this, the same happens, but any amounts they've missed in the meantime are held as a potential payment, in case they've underestimated. When the declaration is done, this would be released if the income was indeed lower.

Especially with Car benefit as CO2 emission rates change which can effect the actual benefit. ok it might not be alot, but what happens of they changed cars in the current year and that vehicle had a different CO2 value? that could make a big difference.

This has no bearing, the tax credit office are wanting the previous year's which has been calculated by the employer and sent to the customer and the tax office. If the customer changed cars in the current year, it wouldn't affect the previous year income at all. If you mean, what if they get the current year estimate wrong, again as long as they don't earn more than £25000 more than the year before, it makes no difference to the current year award. If they underestimate, then yes it could be a problem, but I'd hope people would put a little leeway into their calculation, plus the tax credit office can't be held responsible for people underestimating. They could of course just say, customers underestimate sometimes, so we wont pay them more if there current year estimate goes down....but then that's not really helping the customers is it? The reason they take current year estimates is to generally base the customer's award on the lower of the current and previous year income....i.e. to benefit customers.

so many variables to think about. My worry is why wont the employer give a P11d details or value at all. Even they should have this down on paper in their files.

I agree The employer should give this. I wonder if it the manager/boss who doesn't know...and if the OP would be better talking to payroll.

The only suggestion I can think of is to either try and work it out backwards if the benefit is reflected in your tax code. Or look it up your self using the list value of the vehicle from say Parkers or even phone the local dealer for your car make and ask them for the taxable value for benefit in kind value

This is a good suggestion. Just make sure, OP, that you mark it down as an estimate if you're working it out yourself, until you get the actual figures. You can then contact your own tax office (your employer should know which is yours, it is not necessarily the one local to you...e.g. mine's always been in Cardiff while i'm in Scotland) and ask them to send out the cash equivalent of the car in a letter to you. You can then phone the helpline to replace your estimate with this actual confirmed figure.

PepJr

Thanks for the replies some useful info in there.

Sorry I forgot to say the form states to use the details for 2008/09. The debate about that has helped answer a question though. The question was 'my earnings for 2009/2010 are (will be) quite a bit higher (they have not increase by more than £25k). Do I need to declare this?’ Sounds like I don’t.

Still not to clear about the value of the company car, and if I need to declare it. It sounds like I do, regardless of what payroll have told me.
So no p11d, because it’s ‘taxed at source’, but payroll or the tax office should be able to tell me the cash equivalent value?

DreamerV wrote: »

I agree The employer should give this. I wonder if it the manager/boss who doesn't know...and if the OP would be better talking to payroll.

It was payroll, I also work for a major company (15k+ employees), I would have hoped they would have the right answer. But it seems not!

Pep

DreamerV

PepJr wrote: »

Thanks for the replies some useful info in there.

Sorry I forgot to say the form states to use the details for 2008/09. The debate about that has helped answer a question though. The question was 'my earnings for 2009/2010 are (will be) quite a bit higher (they have not increase by more than £25k). Do I need to declare this?’ Sounds like I don’t.

You need to declare it, but it wont make a difference till April 6th onwards (best to get it done in time for that, so they can reduce you're 2010/11 payments before they start overpaying you). Shame about your payroll...it can be a bit hit or miss. Sometimes I ring back to talk to someone else...as it seems different HR/payroll staff have different amounts of knowledge!

PepJr

DreamerV wrote: »

Shame about your payroll...it can be a bit hit or miss. Sometimes I ring back to talk to someone else...as it seems different HR/payroll staff have different amounts of knowledge!

Checked my P60 and wage slips in properly today. And twigged what Payrol were on about... the 'value' of my car is included on my gross income line (I'm taxed on this), that carries through to my p60. From the perspective of my tax credits form the value of the car is included in my gross pay figure, so including it in 'benefits in kind' would be putting it on twice.

DreamerV wrote: »

You need to declare it, but it wont make a difference till April 6th onwards (best to get it done in time for that, so they can reduce you're 2010/11 payments before they start overpaying you).

The form probably won't be processed til then, sending it tomorrow. Do I have to do a new form each year, or just notify them of changes?