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Employer settles Self Assessment liability on BIK

An employer provided an employee with a living accomodation benefit.  The value is worked out and put on the 2009 P11D and SA return of the employee.  The Company agrees to settle the SA liability on 31 January 2010 and the payment on account for 2009/10 and does so.

The benefit in kind of the SA payment on 31 January needs to be reported on the 2010 P11D.  Am I correct under Section B not M as this is an employee not a Director and no beneficial interest in the company.

My fear is that there may be a grossing up issue or does this only apply to tax not deducted on remuneration excluding tax on BIKs.


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05th Jul 2010 12:09

Surely you should gross it up.


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By d_doyle
05th Jul 2010 12:36

Is a personal tax bill a pecuniary liability.

Personal Expense paid directly by the employer is a pecuniary liability ?


Payroll - Class1 only

P11D - Tax

What we are really asking. Is a personal tax bill a pecuniary liability.






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By d_doyle
05th Jul 2010 13:01

Grossed up

Thanks George

I assume you mean grossed up for the purposes of the NI borne.

So £5000 SA liability settled example:

grossed up say 123.8/100 = £6190 unless of course the Ees NI was collected via a net pay deduction.

The £6190 is the P11d entry.

I see why the PSA was better would only have been £5922 for basic rate taxpayer.

If only the Class 1 was applied via the payroll !









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