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Posted Wed, 19 Jun 2024 13:59:15 GMT by CindyA
Hi, a few questions related to taxable benefits and P11D reporting. The company is offering a health insurance plan to our employees because we would like to provide eye test to all our employees who are using computer monitor/screen for work. We understand that eye test and annual medical check should be non-taxable benefits, so we didn't report this health insurance in P11Ds. However, the same health insurance plan also includes coverage for hospitalisation/dental which may be taxable instead. The company is paying a premium of £52 per employee per year for this plan to the insurer. 1. Should the company report to HMRC this health insurance plan as the plan includes both taxable (hospitalisation/dental) and non-taxable (eye test/annual check-up) benefit items? 2. If the company should report to HMRC, how do we calculate the value for the portion of the taxable part? 3. The company didn't include this health insurance plan in P11D submission in previous years as the health plan was thought to be non-taxable benefit. If we have to report it now, should we submit the P11D correction form for our existing and terminated employees? 4. If the company has to report this benefit now, I guess the company will have to pay back the Class 1A contributions for all these years? 5. What about the income tax implication to our existing and terminated employees? Do they have to back pay the additional income tax for this benefit for all previous tax years? Or will it be the employer liability to pay the additional income tax in this case? Thank you for advice in advance!
Posted Fri, 21 Jun 2024 15:19:46 GMT by HMRC Admin 13
Hi If the plan gives a breakdown of each cost separately i.e. • the amount for the eye test, • the annual check-up, • dental cover etc then the amounts relating to the taxable benefits would be reported on P11D for the employees. If there is no breakdown, then the full amount would need to be reported on P11D as a taxable benefit. For previous tax years you will need to submit amended P11Ds for the affected employees including employees who have left and amended P11D(b) for the years concerned paying over the additional Class 1A National Insurance due. Once the amendments have been processed the employees will be notified of any changes to their tax codes to take account of this previously untaxed benefit. Thank you

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