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Posted Mon, 26 Sep 2022 11:28:34 GMT by Rob W
We have a client who is a director of a limited company. The ltd company pays for the clients school fees as a benefit. The contract is between the client and the school, not the ltd company and the school. As we understand it if the ltd company pays the school fees directly to the school, rather than through the employee, this needs reporting to HMRC on the clients P11D form. Class 1 National Insurance will be deducted through the payroll but there will be no additional PAYE to be paid. Do the school fees need only be entered at the tax year end on the P11D form or do they also need to be entered as a payrolling benefit in kind (which i understand needs to be registered before the start of the tax year)? If the latter is the case we are currently too late for PBIK so what do we need to do about this?
Posted Tue, 27 Sep 2022 12:37:01 GMT by HMRC Admin 17

Employee arranges the goods or services, but Employer (Ltd coy) pay the supplier directly report the cost on form P11D for income tax.

And add the full cost to the employee’s earnings and deduct Class 1 National Insurance (but not PAYE tax) through payroll.

You can register for payrolling for next tax year by going here :

Payrolling employees: taxable benefits and expenses   .

Thank you.

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