Benefits in kind and self assessment

crispy_chris

Hi there,

My partner currently gets £3000 worth of benefits in kind from her employer and her tax code has been reduced accordingly (510L) - meaning that via PAYE she's paying ~ £600 for those benefits.

However she's filled in her self-assessment detailing the earnings on a rental property, leaving (after advice from HMRC no less) the benefits in kind box blank - on the basis that she's already paid the tax via her tax code.

As a result, she's now been given a bill for £600 from HMRC for her benefits in kind.

Surely this is incorrect as she's effectively being charged twice for the same thing, no?

Got an appointment with someone at the tax office to discuss, but would like to be sure that we haven't got it wrong.

Cheers

jem16

crispy_chris wrote: »

However she's filled in her self-assessment detailing the earnings on a rental property, leaving (after advice from HMRC no less) the benefits in kind box blank - on the basis that she's already paid the tax via her tax code.

As a result, she's now been given a bill for £600 from HMRC for her benefits in kind.

How would they know about her benefits in kind if she didn't include them?

I would have expected you to have included them and it would be balanced out when you filled out the employment section as she would have paid more tax than normal.

crispy_chris

jem16 wrote: »

How would they know about her benefits in kind if she didn't include them?

I would have expected you to have included them and it would be balanced out when you filled out the employment section as she would have paid more tax than normal.

They (HMRC) do already know about the benefits in kind via her employers P11D - hence her tax code being reduced by around £3,000.

So whats happening at the moment is that they believe she's underpaid tax of £600, while at the same time overpaying tax of £600 (via PAYE)?

Lovelyjoolz

The Self-Assessment form must include ALL income and all benefits in kind. nd to be fair, it does say that on the form itself. It's not HMRC's fault that your partner filled out the form wrong is it?

Fortunately, if you have a meeting scheduled with HMRC it should be easy to correct, as long as she takes with her the P60 and P11d from her employer.

Just chalk it up as lesson learned and do it right next year.

jem16

crispy_chris wrote: »

So whats happening at the moment is that they believe she's underpaid tax of £600, while at the same time overpaying tax of £600 (via PAYE)?

What did the actual self assessment throw up? Did it say you were due a refund or was there something to pay?

crispy_chris

jem16 wrote: »

What did the actual self assessment throw up? Did it say you were due a refund or was there something to pay?

It said she owes just over £600 in unpaid tax

crispy_chris

Lovelyjoolz wrote: »

The Self-Assessment form must include ALL income and all benefits in kind. nd to be fair, it does say that on the form itself. It's not HMRC's fault that your partner filled out the form wrong is it?

Fortunately, if you have a meeting scheduled with HMRC it should be easy to correct, as long as she takes with her the P60 and P11d from her employer.

Just chalk it up as lesson learned and do it right next year.

Absolutely, it was filled out incorrectly and this is the consequence - no complaints there.

Just wanted to make sure that it's now it's a simple case that she hasn't declared the £3000 benefits in kind on her self assessment, but she has already paid the tax for it so while the form has been filled out incorrectly - ultimately the tax has been paid and so she doesn't owe anything.

jem16

crispy_chris wrote: »

It said she owes just over £600 in unpaid tax

If that's purely a result of the Self Assessment form, then surely that will not be down to the benefits in kind but perhaps due to the tax owed from the rental income?

Was the SA completed online or by paper return?

Do you have the actual figures which are worked out from the SA?

crispy_chris

It specifically says in the letter from HMRC that the £600 is owed from the benefits in kind that weren't declared.

It was completed online and no I don't know the exact figures off the top of my head.

Thanks for the help by the way

jem16

crispy_chris wrote: »

It specifically says in the letter from HMRC that the £600 is owed from the benefits in kind that weren't declared.

OK fair enough. However the extra tax that your wife paid on her salary due to having a lower tax code may have negated any tax due on the rental income. So you may find you still owe tax.

It was completed online and no I don't know the exact figures off the top of my head.

If you have saved a copy it might be worth checking out the figures.