How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15761
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

P11D Benefit in Kind: My company has started a PMI policy on

Resolved Question:

P11D Benefit in Kind: My company has started a PMI policy on behalf of employees. The policy started on 1st October 2015 and I was expecting to be charged for 6 months as the benefit, to 6th April 2016. However the company accountants are saying that because the company chose to pay annually in advance, as opposed to by monthly DD, then the full amount for a year is the BIK that goes on the P11D. This doesn't seem fair, but is it correct? (This is a benefit that the employees have not actually received yet!)
Submitted: 6 months ago.
Category: Tax
Expert:  TonyTax replied 6 months ago.

Hi.

You only receive the benefit if there is a claim unless the cover comes with regular medicals for the staff.

I'm afraid that the company accountants are correct in the way that they have dealt with the annual payment.

I hope this clarifies things for you but let me know if you have any further questions.

Customer: replied 6 months ago.

So you are saying that a company choice on funding method impacts the benefit charged to the employee? That doesn't really make sense in the context of a group scheme, because the employee is suffering for no logical reason.

Expert:  TonyTax replied 6 months ago.

I've been completing P11Ds for many years and I can only tell you what the tax rule is. Your employer might say that its more efficient to pay the premium annually and I know some providers give discounts for annual payments as opposed to monthly payments.

Customer: replied 6 months ago.

Yes I understand it would be the norm. However I am quite attracted to the argument that one should first look at what benefit has been received - in this case 6 months worth of medical insurance - and then calculate the cost of that benefit.

Expert:  TonyTax replied 6 months ago.

The tax point is the date of payment in the case of private medical insurance provided by an employer. You have full cover from day one so the fact that the premium covers part of one tax year and then the next is irrelevant. If your employer paid your annual car insurance premium and that cover was spread over two tax years, the payment would be taxable as additional salary through the first payroll run following that payment. My point is that tax isn't always logical.

Customer: replied 6 months ago.
OK, thanks. As a follow up though, we have an employee for whom we paid a full year, but he left after 3 months in December. What then?
Expert:  TonyTax replied 6 months ago.

That depends on the terms. I've had clients who have continued to be covered after retirement, at least for a few months and have, therefore, had a taxable benefit.

If the cover ceases when the employee leaves, then the taxable benefit can be apportioned.

Customer: replied 6 months ago.
OK, thanks.
Expert:  TonyTax replied 6 months ago.

Thanks.

Would you mind rating my answer before you leave the site please.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15761
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions