Payment in kind - tax and medical insurance

DennC

Hi,

I have a question about the tax implications of medical insurance with a new job.

My new employer is offering to pay for a basic level of medical insurance (about £5 per month), and I was thinking of taking this up, but I've also read (in the terms and conditions) that this would be viewed as a 'payment in kind' with tax implications.

Anyone have a view on this?

I'm in the basic rate of tax by the way.

Thanks

D

Dazed_and_confused

Your employer will normally report a "benefit in kind" value to HMRC and this is added to your other taxable income when calculating how much tax you need to pay.

Your employer issues you with a certificate (called a P11D) once a year showing the benefit.

So if the benefit was £60 and this was to be taxed at basic rate then it would cost you £12 extra tax

You might want to check with your payroll/HR department what the P11D value is expected to be so there are no nasty surprises later on.

Brynsam

DennC wrote: »

Anyone have a view on this?

Not sure what sort of 'view' you want. Yes, what you read is factually correct. £12 a year in tax for private medical cover, if that's what you are getting, is a bargain.

LilElvis

£5 a month? No private medical insurance premiums are that cheap! I would be asking what the level of cover/ annual excess is as this doesn't sound right

Dox

Sounds like a healthcare cash plan: https://www.moneysavingexpert.com/insurance/healthcare-cash-plans/