P11D Issue

Bluebirdman_of_Alcathays

All,

Just received my P11D for 14/15, the only benefit received was PMI. Around half the firm have received the benefit for the full year, their cash equivalent is £600. I, like the other half of the firm, were only eligible to receive PMI from 1st January 15. We have also been assessed on a cash equivalent of £600.

I've challenged HR that surely this should be pro rated, and our benefit is only £150. They have said no, that it isn't pro rated.

Is my understanding correct? If so have HMRC published any guidance - I can't find any.

Regards,
BoA

quietriot

Generally, the amount you pay tax on is the amount paid by your employer: http://www.hmrc.gov.uk/manuals/eimanual/eim21102.htm
So if they employer's paid £600 for 3 months insurance for you, you may be out of luck.

But see also: http://www.hmrc.gov.uk/manuals/eimanual/eim21200.htm
regarding apportionment.

Chances are the employer's paid full rate and reported that on the P11D. You may have to get some proof in writing that you only became eligible for the cover on Jan 1st and send this into HMRC to get the benefit apportioned for the year.

jimmo

It sounds like the £600 is a full year’s premium so that you are covered for the year to 31/12/15. Whilst that is 3 months last year and 9 months this it is still taxable in full for 2014/15, the year the premium was paid.

Bluebirdman_of_Alcathays

jimmo wrote: »

It sounds like the £600 is a full year’s premium so that you are covered for the year to 31/12/15. Whilst that is 3 months last year and 9 months this it is still taxable in full for 2014/15, the year the premium was paid.

Thanks, goes against the accruals and prepayments logic I initially thought, but then I don't think I'll ever learn our entire tax code!

jimmo

Accruals and prepayments are the realm of the self-employed and companies.
There used to be the Earnings basis which was pretty much the same thing for directors but us lesser mortals have really been on the Receipts basis all the time.
http://www.hmrc.gov.uk/manuals/eimanual/EIM42205.htm