Staff Mortgae offer = good offer?

less2spend

Hi All,

I’m trying to work out if I am actually benefitting from my staff mortgage offer (I work for a high street bank).

I’ve just had a surprise tax adjustment (not in my favour) because the P11D forms were either submitted late or they did not contain correct data (from my employer). This has been a regular thing for 3 years and I'm getting fed up with it. I like to keep my finances tidy and at the moment my tax is ruining my plans.

My current offer is 1.74% plus base (so 2.24% at the moment). HSBC currently have a fee free 2.49% plus base offer (2.99%). I thinking of moving to get back to a very simple tax structure.

Are there any excel calculators out there that could help me? I’ve tried to do it myself using the formula on the HMRC website but I’m not confident that I got it right. I understand I pay 40% tax on the benefit amount using an official HMRC rate (4%).

Any guidance appreciated.

Thanks

opinions4u

Tax liability is 4.00% - 2.24% = 1.76% x 40% tax = 0.70% (0.35% for basic rate).

So your rate, inclusive of tax, is effectively 2.24%+0.70%=2.94% (2.59% for basic rate).

There may be other fees waived on a staff deal. Depending on income chucking a bit at the pension could drag you back to being a 20% taxpayer.

less2spend

Great. Thanks for taking the time to respond.

Thrugelmir

less2spend wrote: »

because the P11D forms were either submitted late

There are sizable penalties for late filing. So unlikely.

opinions4u

Thrugelmir wrote: »

There are sizable penalties for late filing. So unlikely.

Heard a rumour that one bank recently tod HMRC that all staff mortgages had been repaid!

Late filing is unheard of. More likely the staff member ends up paying two years of BIK tax in the same tax year as submission of P11D is always in arrears.

less2spend

I have some investigations to do. The mortgage balances always matched the numbers on the P11D's. If something was wrong I also need to find out why they are adjusting 3 years in one go. Surely if 2009 was wrong it could have been adjusted in 2010 etc