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A new client aged 75 has recently had his PAYE code altered to incorporate a BUPA subscription of £3,131 paid by his former employer, a national institution. This is costing him £1,005 in terms of tax as not only is there 22% tax to pay on the £3,131, but in addition his age allowance and married allowance are reduced. His code, after also taking account of his state pension, is K146. His distress was aggravated by the PAYE district not applying the new code on a month 1 basis when his pension for August was paid.
A new client aged 75 has recently had his PAYE code altered to incorporate a BUPA subscription of £3 131 paid by his former employer a national institution. This is costing him £1 005 in terms of tax as not only is there 22% tax to pay on the £3 131 but in addition his age allowance and married allowance are reduced. His code after also taking account of his state pension is K146. His distress was aggravated by the PAYE district not applying the new code on a month 1 basis when his pension for August was paid.
Could Taxation readers kindly quote the relevant legislation on this subject?
Query T16 935 — Fairfax.
Reply by Classis:
Prior to 6 April 2006 a benefit of this sort provided at the discretion of the former employer escaped taxation. It did not fall...
