OK, maybe not so straightfoward P11D question after all!
I posted a question earlier in the week regarding a client that was payrolling their BUPA benefit to their employees. It appeared to be straightforward. the company was paying for BUPA and the employees were having the cost of the BUPA healthcare deducted from their payslips. Easy peasy. Enter amount of healthcare for employee on P11D and enter the same amount in the 'Amount Made Good' box.
The stroppy admin assistant that administers the payroll has waited until the day before the filing deadline to inform me (in an entirely irritating manner) that the employee taking up the BUPA is given a BUPA allowance in their Pay. So the amount of the BUPA benefit is added to their gross salary and shown as a separate line on the payslips. Tax and NICs is deducted. Then the BUPA deduction is taken out of the net pay.
The BUPA allowance is being added to the gross salary and having tax deducted but not NICs. This is why she is saying that it is a benefit.
I don't understand, surely if they are increasing the salary by £x to cover the bupa allowance this should be taxed and NICd in the same way as if they were to provide a salary increase. This would be mean the employee is out of pocket as the same amount is being deducted from the gross salary.
I am confused!
Thanks in advance for any help or advice!