Benefit in Kind (BIK) and Halifax Intermediaries

Dogsasleep

Does anyone have any experience / advice please?

We are applying for mortgage with Halifax and they have just reduced their mortgage offer to us because they say they need to deduct the full monthly amount of the BIK (£400) from our affordability calculations because its a commitment. 

£400 is shown on the payslip , on the deductions side, as -£400. Halifax therefore consider this is being deducted from gross pay.  It isn't, and if you do the maths, it isn't being deducted. 

Payroll advice is that this £400 is how much of the BIK is being taxed each month - with the tax only being deducted, and is included in the total tax deductions.

How do we proceed to explain this to Halifax, because as you can imagine its having a BIG impact on how much they're prepared to lend.

TIA

Brie

Get your payroll to confirm in writing what your gross and net pay is.  My previous employer used to do this to confirm what actual salary was as there were so many salary sacrifice options.  

BoGoF

With payrolling benefits in kind becoming mandatory from April 2026 then Halifax need to get their understanding sorted.

Dogsasleep

So they aren't correct on their thinking??  I can't understand why they would be right - but then I don't give out mortgages for a living!

Dogsasleep

Brie said:

Get your payroll to confirm in writing what your gross and net pay is.  My previous employer used to do this to confirm what actual salary was as there were so many salary sacrifice options.  

They are writing one! I do hope it helps!

amnblog

£400 is shown on the deductions side of the payslip?

If you are not being deducted £400 from your gross income (you suggested £400 is the BIK value, not the tax due as a result of the BIK value), what is it doing there?

Dogsasleep

Its shown as a negative - on the deductions side... which... I believe turns it to a positive ...in accounting terms... and is there to show indicate what % of the income tax deductions are calculated from that BIK.  But, I'm guessing that. Hence my question!  BIK is equivalent to  £400 a month - but it wouldn't be much of a benefit if payroll just deducted it straight back off!!!??

Dogsasleep

amnblog said:

£400 is shown on the deductions side of the payslip?

If you are not being deducted £400 from your gross income (you suggested £400 is the BIK value, not the tax due as a result of the BIK value), what is it doing there?

Its a new way of payrolling BIK as far as I can gather - stops the need for adjusting tax bands??  The payslip clearly shows that gross salary minus tax and ni is equal to the net salary that is paid into the account.  It def hasn't had £400 deducted, on top of tax and ni.

amnblog

One for we Brokers to look our for because that sounds like a nonsense way to log the BIK.

Are you with a large (national) or (small) local employer.

Dogsasleep

amnblog said:

One for we Brokers to look our for because that sounds like a nonsense way to log the BIK.

Are you with a large (national) or (small) local employer.

Large national company.  Like @BoGoF says, its going to be mandatory from 2026.  Just seems we are ahead of the game and paying the cost - literally!  You can imagine the impact that its having on what we can borrow.

Dogsasleep

If you go to government website and look up payrolling - expenses and BIK you can read all about it

It won't let me post a link.

I'm stumped as to how to proceed regarding getting Halifax to budge!