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Benefit in Kind vs Payrolling
Ed-1
Posts: 4,012 Forumite
in Cutting tax
You earn £40,000 salary.
If your employer provides you with a company car as a benefit in kind (reported on a P11D) worth £12,000 can this make you a higher rate taxpayer as your total taxable amount is £40,000 + £12,000?
How is it different to your employer payrolling the company car (adding the cash equivalent to your salary)?
If your employer provides you with a company car as a benefit in kind (reported on a P11D) worth £12,000 can this make you a higher rate taxpayer as your total taxable amount is £40,000 + £12,000?
How is it different to your employer payrolling the company car (adding the cash equivalent to your salary)?
0
Comments
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Yes, the benefit is just another form of taxable income.
The difference is the process, payrolling avoids the need for a tax code adjustment.0 -
Just to clarify - is the benefit in mind figure actually £12000? What is the value of the car?Ed-1 said:You earn £40,000 salary.
If your employer provides you with a company car as a benefit in kind (reported on a P11D) worth £12,000 can this make you a higher rate taxpayer as your total taxable amount is £40,000 + £12,000?
How is it different to your employer payrolling the company car (adding the cash equivalent to your salary)?0 -
The BIK value is around £9,000 including fuel (£12,000 is hypothetical).purdyoaten2 said:
Just to clarify - is the benefit in mind figure actually £12000? What is the value of the car?Ed-1 said:You earn £40,000 salary.
If your employer provides you with a company car as a benefit in kind (reported on a P11D) worth £12,000 can this make you a higher rate taxpayer as your total taxable amount is £40,000 + £12,000?
How is it different to your employer payrolling the company car (adding the cash equivalent to your salary)?
Also payrolling the BIK affects the personal savings allowance (i.e. reduces it to £500) whereas doing it on a P11D doesn't. Is this right?0 -
No. The tax impact is the same, you have additional taxable income of £9,000 whether it is payrolled or done through a P11D.Ed-1 said:
The BIK value is around £9,000 including fuel (£12,000 is hypothetical).purdyoaten2 said:
Just to clarify - is the benefit in mind figure actually £12000? What is the value of the car?Ed-1 said:You earn £40,000 salary.
If your employer provides you with a company car as a benefit in kind (reported on a P11D) worth £12,000 can this make you a higher rate taxpayer as your total taxable amount is £40,000 + £12,000?
How is it different to your employer payrolling the company car (adding the cash equivalent to your salary)?
Also payrolling the BIK affects the personal savings allowance (i.e. reduces it to £500) whereas doing it on a P11D doesn't. Is this right?0
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