Payrolling Benefits in Kind and Universal Credit

Our company is looking into the possibility of moving away from the P11D process and payroll benefits in kind instead. We only have private medical insurance and this would go through our payroll agent as a notional earning so no money is actually paid to the employee and the taxability would be set to Payrolled BIK so it would be taxable but not used to calculate National Insurance. It would be reported to HMRC on the Full Payment Submission file. We have been trying to find out if this would have any impact on employees who are entitled to Universal Credit and whether it would be counted toward their earnings even though no money is actually paid to the employee. HMRC referred us to Universal Credit and Universal Credit referred us back to HMRC and we haven't been able to obtain a firm response. Can you advise on this please?

Hi Jenny GLF,
As you are reporting a higher income then it may be the case it would affect these however payroll software should allow you to put the payroll benefits figure into a seperate box, I would contact the DWP to get advice on how they would use this information.
Thank you.