Received a P11D from a previous employer

Jmnathan_2 · 7 July 2017 at 10:32PM

I started a new job in January 2016. In April 2016 I received a P11D from my old employer for medical insurance which they assured me was stopped when I left. The amount on this was pro-rata for the 10 months I was working there. Today I have received one from them again for the 2016/17 tax year. I contacted them and they confirmed that my medical insurance was continued until the end of January 2017, a full year after I left them.

Where do I stand with regards to this? Technically there was a policy in my name paid for but I had no idea about it and I wasn't employed by the company at all during the tax year. Do I just explain it to HMRC and hope they don't force me to pay the benefit in kind?

xylophone · 7 July 2017 at 11:45PM

https://www.citizensadvice.org.uk/debt-and-money/tax/what-is-taxable-income/tax-on-benefits-in-kind/

Benefits in kind are benefits which employees or directors receive from their employment but which are not included in their salary cheque or wages. They are sometimes called ‘perks’ or ‘fringe benefits’. They include things like company cars, private medical insurance paid for by the employer and cheap or free loans. Some benefits in kind will not be taxed. Benefits in kind will not be taxed for people who earn less than their personal allowance. Some benefits in kind will be taxed for everyone, whatever their income.

If you weren't employed by the company, how can it be a BIK?

Jmnathan_2 · 8 July 2017 at 9:14AM

Precisely, but if they've paid for it then technically I've received it presumably? I will contact HMRC as they will have received the form themselves anyway so they only raise it with me in the future if I don't.

Dazed_and_confused · 8 July 2017 at 9:33AM

There have been a few posts on here about P11D issues and a recurring theme from those has been HMRC reluctance to get involved, they will simply tax you on the benefit your ex employer has declared and it would be upto your ex employer to send HMRC a correction to the P11D if it's wrong.

But it may not be wrong, you have received the benefit because you were employed by the company, you aren't just some random person they've chosen! If you couldn't get taxed on employer benefits after you'd left a job it would mean you could say have a company car tax free if you were allowed to keep it until, say, the lease expired.

Maybe a more important consideration is what the P11D shows your benefit to be and how this will impact your tax bill.

And I'd be annoyed that they hadn't told you about this as presumably you wouldn't have actually used the service available simply because you didn't know it existed

xylophone · 8 July 2017 at 9:55AM

But can the employment-related benefits charge in ITEPA 2003, s 201 apply for tax years after the tax year in which employment ceases?

http://www.legislation.gov.uk/ukpga/2003/1/section/201

Apart from that,

In April 2016 I received a P11D from my old employer for medical insurance which they assured me was stopped when I left.

If there is any cost to the OP, it seems to me that he should either require the old employer to reimburse him or to sort the matter out with HMRC as they did not provide the correct information.

00ec25 · 8 July 2017 at 10:50AM

xylophone wrote: »

But can the employment-related benefits charge in ITEPA 2003, s 201 apply for tax years after the tax year in which employment ceases?

part 6 chapter 3 sections 401 - 404 of that Act covers payment of benefits to ex employees http://www.legislation.gov.uk/ukpga/2003/1/part/6/chapter/3

“the relevant tax year” means the tax year in which the payment or other benefit is received.....this link provides an explanation of how it should be applied...

https://www.taxation.co.uk/Articles/2011/04/13/274551/question-benefit

abridged summary: "If it turns out, following a critical appraisal of all of the facts, that the employee has not retired, then... any continuing benefits, will be taxed following normal principles and reported accordingly."

i don't know if there is legislation or test cases since then which are relevant

jimmo · 8 July 2017 at 11:00PM

00ec25 wrote: »

part 6 chapter 3 sections 401 - 404 of that Act covers payment of benefits to ex employees http://www.legislation.gov.uk/ukpga/2003/1/part/6/chapter/3

“the relevant tax year” means the tax year in which the payment or other benefit is received.....this link provides an explanation of how it should be applied...

https://www.taxation.co.uk/Articles/2011/04/13/274551/question-benefit

abridged summary: "If it turns out, following a critical appraisal of all of the facts, that the employee has not retired, then... any continuing benefits, will be taxed following normal principles and reported accordingly."

i don't know if there is legislation or test cases since then which are relevant

I can't access that article in Taxation, well not without paying £394 which I am not prepared to do, so I don't know whether I disagree with the article or your interpretation of it.
HMRC, on the other hand seem to agree with xylophone that (except in specific circumstances) there can be no charge to tax under S 201 ITEPA 2003 for a benefit which arises in a year where the employment did not exist.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim20040
The OP doesn't appear to have retired so the possibility of a charge under Ss 398 and 399 seems extremely unlikely.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim15120
Therefore the only possibility of a tax charge is under Sec401 ITEPA 2003 but the first £30,000 of such income and benefits is exempt under S403 ITEPA 2003.

We don't know the OP's exact circumstances but a tax liability seems extremely unlikely.

Perhaps more worrying is that the former employer has completed a P11D for a year when the OP was not their employee. They really shouldn't have.
I like to think that HMRC will recognise that and the OP will hear nothing from them but have to admit that I have recently experienced an instance of "Computer says no." with HMRC so we could all be back in a few months advising on how to handle that.

Received a P11D from a previous employer

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