BIK employee tax

An employee has stated that they did not know that a bik (pvt health insurance, only a small amount) would affect their tax and if known they would have rejected it. Their tax code was changed by HMRC which meant that their tax free allowance was reduced for the bik (by 100). As we are not able to confirm that this person was aware they have requested that we refund the extra tax they have paid, which I am inclined to accept. If we can do this how would it be paid? Would it be an extra payment that is subject to tax and ni with a net value of what they lost from their pay the previous year?

Hi PhillH,
If they have received the benefit and it is taxable, they should pay the tax on this.
If you wish to pay the tax and NI on their behalf you will have to gross up the benefit amount and pay them the extra salary to cover this charge.
Bearing in mind that this itself will incur and tax and NI charge.
Thank you.