Taxation of a benefit in kind

taxing_too

Hi all,

I've recently been going through recent pay slips with a fine toothed comb, and I'm confused by the taxation around (company provided) private medical insurance.

I've noticed that:

i) My tax code (personal allowance) has been reduced by the value of the policy premium.... AND...

ii) The value of the policy premium has also been added to my "Taxable Income" amount.

Isn't this double taxation, or have a I misunderstood?

Many thanks to anyone who can help to explain!

zygurat789

taxing_too wrote: »

Hi all,

I've recently been going through recent pay slips with a fine toothed comb, and I'm confused by the taxation around (company provided) private medical insurance.

I've noticed that:

i) My tax code (personal allowance) has been reduced by the value of the policy premium.... AND...

ii) The value of the policy premium has also been added to my "Taxable Income" amount.

Isn't this double taxation, or have a I misunderstood?

Many thanks to anyone who can help to explain!

Yes, the way you describe it.
Method 1 is correct. Query, with your wages departmenrt, why they have done method 2.

dori2o

zygurat789 wrote: »

Yes, the way you describe it.
Method 1 is correct. Query, with your wages departmenrt, why they have done method 2.

Many employers do include the medical insurance now on the payslip as you describe, by adding it to your monthly/weekly taxable income.

If this is how it is being done with you then contact HMRC to advise and they will remove the BIK from the code.

How long has the Medical insurance been on your payslip? If it has been for a number of years you may be due a refund if not already received.

First of all check with your employer that what is on your payslip equates to the full value of the benefit. Also ensure that they are not going to file a P11d at year end which includes medical otherwise at year end when HMRC reconcile the data on your record they will add in the Medical insurance into any calculations they do.