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Receiving Taxable Benefits for the First Time - Looking for Advice

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MartinSpoon
MartinSpoon Posts: 100 Forumite
Part of the Furniture 10 Posts Combo Breaker
edited 8 April 2011 at 10:35AM in Cutting tax
I've just started to receive a couple of taxable benefits of work, which of course I am happy about, but having never had any remotely complex tax requirements before now, trying to understand what I Should and Shouldn't do is a bit of a nightmare. Can anyone on MSE help? :D

I now receive health insurance with a taxable benefit value of around £500. My employer will send the IR a P11D (?) at the END of the FY, telling them what I have received that year. Fellow employees I've spoken to, who told me they did not proactively contact the IR, said that they are paying the tax on that benefit in arrears (e.g. the benefit they received in 09/10 is being paid in 10/11). Does this sound right so far?

I would prefer to be paying what I should be paying each month. Therefore, can I/should I call the IR, and tell them "in 11/12 I will receive a benefit of value £500, please issue me a new tax code accordingly"? If I do that, do I make things more complicated at the end of the year when my employer sends the P11D?


I've also got the option of a company car, or of a cash alternative. I think I have this one understood a little better... If I take the company car, my employer will send the IR an M11 (?) each month, telling them I am receiving the car. Therefore I don't need to proactively tell the IR about the car. If I take the cash alternative, that gets paid via my payroll, and tax is collected as part of regular income taxation.

...lets ignore fuel costs for now.

What a minefield! :rotfl:

Comments

  • mrkbrrws
    mrkbrrws Posts: 337 Forumite
    If you start getting a health insurance benefit in 2011/12, your employer should submit a form P11D to HMRC by July 2012. Following which HMRC would amend your 2012/13 tax code for both the 2011/12 underpayment and the benefit expected to be received in 2012/13.

    You could contact HMRC and inform them of the benefit being received and they should be able to put a deduction in your 2011/12 tax code, so that you pay the right amount of tax in the year. When the P11D finally arrives, HMRC will compare the tax you should have paid with what you actually did and assuming there is no significant difference they will take no further action (apart from including the expected continuing benefit in your 2012/13 tax code).

    If you get a company car, your employer is required to inform HMRC using form P46(Car) which may take a couple of months and it would be a good idea to check that your tax code does get amended in due course.
    I am an Accountant. You should note that this site doesn't check my status as an Accountant.
    All posts on here are for information and discussion purposes only and should not be seen as professional advice.
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