Taxing a benefit

Following on from the recent suggestion that the form P11D might be abolished a client employer has asked whether they might — formally or informally — be able to achieve the same result now. In their circumstances the main benefit that they provide for their employees is medical insurance.

They have asked us whether it would be possible to arrange for the tax liability on benefits in kind to be paid during the year via the PAYE system rather than by completion of a P11D and an adjustment to the code or separate payment by the employee.

Is this possible and if so would the amount have to be grossed up? Also what would the National Insurance position be?

Readers' thoughts are welcomed.

Query 17 178 — Ben.

Reply by J.G.

The recent consultation document referred to informal arrangements entered into whereby benefits and expenses...