Tax credits/payment in kind

dove1

Hi

My wife has just started work in admin at our childrens independant school.She gets a basic salary of around 10k gross and a 50 % reduction in the school fees.
The Family tax credits form simply asks for our income as shown on her
PAYE slip.Having finally got through on the phone the line was so bad I gave
up and thought I'd try my luck her! Is payment in kind excluded?

thanks in advance

Skint_yet_Again

If the employer pays for school fees as part of "salary" this can be a "benefit in kind". If this is a "benefit in kind" it will be shown on a P11d by the employer at the end of the tax year and your wife will have to declare it as income to tax credits and pay tax on it also... maybe she needs to ask the employer to confirm if it is a benefit in kind, as they should know this. Hope this helps

zagfles

Skint_yet_Again wrote: »

If the employer pays for school fees as part of "salary" this can be a "benefit in kind". If this is a "benefit in kind" it will be shown on a P11d by the employer at the end of the tax year and your wife will have to declare it as income to tax credits and pay tax on it also... maybe she needs to ask the employer to confirm if it is a benefit in kind, as they should know this. Hope this helps

There are differences in the tax and tax credits treatment of benefits in kind, see here though I couldn't find this example..

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04103.htm

Skint_yet_Again

School fees are not listed as excluded here

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04103.htm

So I would still say check with school if this is a taxable benefit and which section of P11d the benefit will be shown then check here:

http://www.hmrc.gov.uk/taxcredits/start/claiming/income-hours/employer-benefits.htm

The table on this link shows what you need to include on your claim form