Medical insurance and tax

jra505

Hello

Last year I started getting private healthcare as a benefit from my employer. As far as I understand it, this benefit has been taxed via my PAYE.


I am now filling in my self assessment and I am being asked for the value of this benefit in kind. I have just read that I need to enter a figure for this, even if the tax has already been collected through PAYE.


How do they ensure that I do not end up paying tax twice?

Thanks,


jra505

00ec25

you have failed to understand a tax return

you declare:
a) total of all income + benefits received as reported under PAYE
b) total of all tax paid through PAYE

patently you have paid tax on the benefit shown on your P11D as reported by the tax shown on your P60

why don't you read up on how the UK tax system works:
https://www.litrg.org.uk/tax-guides/tax-basics

jra505

00ec25 wrote: »

you have failed to understand a tax return

you declare:
a) total of all income + benefits received as reported under PAYE
b) total of all tax paid through PAYE

patently you have paid tax on the benefit shown on your P11D as reported by the tax shown on your P60

why don't you read up on how the UK tax system works:
https://www.litrg.org.uk/tax-guides/tax-basics

Hmmm..... a little condescending you think? Clearly I'm not an expert on tax, that was why I was asking a question on this forum.


If I've already paid tax on the benefit, as shown on my P60, then presumably the value of that benefit is included in my total earnings as shown on my P60. So, why then when I am asked to declare what benefits I have had from my employer, does the HMRC website add the value of the benefit to the value of my total earnings as shown on my P60? Does that not mean it is being considered twice?

dori2o

In order to check you have paid the correct amount of tax HMRC needs you to fill in the form showing all income and benefits.

Now, medical insurance is taxed in one of 2 ways. Either as a benefit in kind where your tax code is adjusted to take account of the benefit and tax is deducted based on that tax code, or, it's taxed directly via your payroll as additional income.

If it's example 1 you should have received a P11d from your employer. This will tell you the value of the benefit.

If example 2 check your payslip, the additional income will be identified on there as medical insurance/Bupa/ or something similar.

In example 1, if you don't show the benefit and you don't owe tax for any other reason, you would end up being incorrectly refunded the tax you have paid in respect of the benefit in kind.

This is because the calculation wouldn't include that part of your income therefore would calculate the tax due based solely on your salary.

You need to include it as it forms part of your total income.

In example 2 the benefit in kind will be included in the taxable income figure of your P60, so you won't need to include it separately.

If this is the only benefit in kind you have, and it is taxed via your payroll and is identified on your payslip, then you should select No as the answer to the question asking if you have any benefits in kind.

Still with example 2, If you do have benefits in kind other than medical, don't show the medical, just show all the others shown on your P11D.

Hope that helps.

jra505

dori2o wrote: »

In order to check you have paid the correct amount of tax HMRC needs you to fill in the form showing all income and benefits.

Now, medical insurance is taxed in one of 2 ways. Either as a benefit in kind where your tax code is adjusted to take account of the benefit and tax is deducted based on that tax code, or, it's taxed directly via your payroll as additional income.

If it's example 1 you should have received a P11d from your employer. This will tell you the value of the benefit.

If example 2 check your payslip, the additional income will be identified on there as medical insurance/Bupa/ or something similar.

In example 1, if you don't show the benefit and you don't owe tax for any other reason, you would end up being incorrectly refunded the tax you have paid in respect of the benefit in kind.

This is because the calculation wouldn't include that part of your income therefore would calculate the tax due based solely on your salary.

You need to include it as it forms part of your total income.

In example 2 the benefit in kind will be included in the taxable income figure of your P60, so you won't need to include it separately.

If this is the only benefit in kind you have, and it is taxed via your payroll and is identified on your payslip, then you should select No as the answer to the question asking if you have any benefits in kind.

Still with example 2, If you do have benefits in kind other than medical, don't show the medical, just show all the others shown on your P11D.

Hope that helps.

That's very helpful, thanks very much