Tax code changed due to medical insurance

jonnyb1978

Just recieved a letter from the tax man or lady saying my tax code had changed from 944l to 910l.

Apparently due to my company updating records to the tax people and as a direct result of my company providing or paying medical insurance for me.

I was under the impression this was provided by my company free.
Is this correct ??

CLAPTON

your company is providing the benefit to you free but it has a value (presumably of 340 pa ) so you are taxed on it
(in the same way as company cars or most other benefits are a taxed)

if you were paying for it then it wouldn't be taxed

SeniorSam

Would that additional tax only apply for the year that the benefit was paid, or continue?

Sam

nomunnofun

Presumably, as Clapton says, the value of the health insurance benefit is £340. I would imagine that that is per annum (it is unlikely that you would take out health insurance for just one year).

It is a taxable benefit and. as a result, you will pay an extra £68 per year in tax (or £136 if you are a higher rate taxpayer). That sounds to me like a good deal!

jonnyb1978

Thanks guys

jamesml

Some companies will pay the tax for you as well, but not all.

suso

nomunnofun wrote: »

Presumably, as Clapton says, the value of the health insurance benefit is £340. I would imagine that that is per annum (it is unlikely that you would take out health insurance for just one year).

It is a taxable benefit and. as a result, you will pay an extra £68 per year in tax (or £136 if you are a higher rate taxpayer). That sounds to me like a good deal!

Don't forget that value of £340.00 has most likely been declared to HMRC on a form P11d, which would cover 2012/13 - the chances are that this is a part year value which has just been carried forward.

So to accurately gauge the taxable value we would need to know roughly when the benefit started.

martinsurrey

If anyone reading this thinks that the BIK charge makes it not worth it, company health insurance is beyond doubt the best thing I ever signed up for.

I'm relatively young, so thought that the need was slim, but went for it anyway.

Had a health scare, and within 72 hours was sat in front of one of the UK's leading consultants on the issue. Then (same day/ next day) I had a barrage of tests which on the NHS had a 4-8 week waiting list, had my results within a week of the problem arising, and the people arranging all of this couldn’t have been more helpful.

The NHS would have got there, my condition was not life threatening, so I would have had a wait on my hands, and against the stress of not knowing the prognosis, made the BIK charge seem like the best value purchase I’d ever made.

If you can afford it, go for it, you never know when you might need it, and if you do, it’ll be well worth it.

(just my 2p worth)

Savvy_Sue

I agree, I was astonished to learn that DS2 had taken advantage of this in his first job after graduating, AND he's started a pension, but I think he's being very sensible!!!