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Healthcare benefit

my client retired from employment in 2010/11 and is in receipt of a company pension. the company paid her healthcare premiums in 2011/12. is this taxable as she is not an employee?

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I am afraid, if it related to the employment (which I am sure it would do)! it is taxable

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On the other hand

A pensioner is not in employment, therefore it cannot be by reason of an employment. s201 ITEPA requires that the person be in the employment at some point during the year.

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From 6 April 2006 the rules changed.

Any scheme or arrangement that continued medical benefit into the retirement of an employee became an employer-financed retirement benefit scheme.

This meant the medical benefit became taxable income under ITEPA 2003, s 394, as it fell within the definition of ‘relevant benefit’.

There is a twist if the employee has left the employment, but has not yet retired. In that case, the rules for payment made before 6 April 2006 continue to apply, so that the medical benefit continues to fall under ITEPA 2003, s 403, and is treated as outlined above.

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I essentially agree with Arthur

S.201(4) simply ensures that a benefit isn't charged to tax under Part 3 of ITEPA.

It doesn't override a tax charge arising under either Chapter 2 (EFRBs) or Chapter 3 (payments and benefits connected with termination of an employment) of Part 6, which then refer to the amount that would be taxable as earnings if the employment had been carried on in the tax year.

In this situation, I'd have expected the medical benefit to be chargeable under Chapter 2 of Part 6, as Arthur alludes to.

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