P11D - benefit kept active in error after employee left

Hello, One of our employees left the business last year, however, their taxable benefit (health insurance) was kept active in error. How do we report this on their P11D? Do we pro rate the overall value/cost only for the time when they were employed? Many thanks!

Hi
Even though the employee is no longer employed by you, you just report the benefit on a p11d as normal.
Thankyou.

Thank you for your reply. Wouldn't that mean that the former employee will be liable to pay tax on the whole amount? Despite not being employed for part of the period when the benefit was active. The error was made by the employer, so employee should not bear the cost for this error?

Hi
If the benefit was still active this would still be treated as taxable and the employee would have a tax liablity on this.
Thankyou.

Hi, The issue is that the person was not longer an employee, but the benefit was still active. So, what you are saying is that, if a company doesn't end the taxable benefit and it stays open for years after the employee has left, an ex-employee would be liable to pay tax on that each year? Surely this is not right. It's not the employee's fault that the benefit was left active after their termination of employment.

Hi
It is not a issue of fault, the employee is still receiving a taxable benefit that otherwise will not be taxed so a P11d would have to be completed.
There are situations where an employer could pay the tax on the benefit for the employee through grossing up or by a PSA.
Thankyou.

Hi, Thank you, this is now understood. Can you please elaborate how an employer can pay former employee part of the tax on benefit they were receiving in error - either through grossing up or by PSA? Thank you.

Hi,
You would most likely have to do it as grossing up if it is a former employee.
Thank you.