BIK calculation

I appear to be confused by a BIK calculation. I receive private medical insurance benefit from my employer and understand this is taxable at the higher rate of income tax that I pay. HMRC have added the value of my medical insurance to my taxable earnings which has reduced my personal allowance (I am earning over 100k). This has the effect of a 20% tax being applied to that benefit (since my personal allowance is reduced by 50p in every £1 above the £100k threshold). Additionally, HMRC have further reduced my personal allowance by the value of my medical insurance benefit. This has the effect of applying a further 40% tax to my medical benefit, so 60% in total. I spoke to HMRC about this and they didn't do a good job of explaining it - other than to say 'the calculation is correct'! I am aware of the 60% tax trap between £100k and £125k - but hadn't realised this is applicable to BIK as well. Does this all seem correct?

Hi,

Yes would be correct. If you have a taxable benefit in kind.

BIK, this will be included in your total income calculation to allocate the correct personal allowance due if earnings over £100K.

As the BIK is included in your tax code and if a higher rate tax payer then you would pay tax at the higher rate tax band on the benefit you eould not pay a higher rate of tax on the BIK.

Thank you.

Hi There I get health insurance through my employer, how is the BIK calculated. i am not fully aware on this.,

Hi,
Unfortunately, it is not possible to check individual tax records through this forum. If you have a question which relates to your personal tax situation or tax code please contact our Income Tax team for advice.
Income Tax: general enquiries
Thank you.