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Medical Insurance

Discovered Private Medical

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Hi all

Just discovered a company paud for Private medical insurance in March 2016 which wasn't notified to HMRC via a P11d.  Can anyone advise me what my options are?

1. Make a voluntary disclosure as HMRC weren't expecting a return.  Can someone advise me what the penalties here will be?  Is there any mitigation for the disclosure?

2. Have the employee reimburse the company, then give the employee an interest free loan for the corresponding amount?  This loan is then written off and a BIK is created for the current year.  Would this option work in practice? (I've read about this somewhere but never done it, seems a bit contrived).

Really appreciate your thoughts.

 

Replies (10)

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By Accountant A
08th Feb 2017 21:02

BMary83 wrote:

Hi all

Would this option work in practice?

No, I can't see it would work at all.

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By hje
09th Feb 2017 09:07

Why not just correct the P11D that was in error?

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Replying to hje:
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By BMary83
09th Feb 2017 09:19

No P11d was completed.

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Replying to BMary83:
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By hje
09th Feb 2017 09:21

Precisely

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Replying to hje:
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By BMary83
09th Feb 2017 10:45

I don't understand, what do you mean?

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By BMary83
09th Feb 2017 09:20

Because it is a disclosure I think the penalty will be a percentage based on whether or nor them deem it to be an innocent error or carelessness, so between 0% & 20%?

Thanks

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By SteveHa
09th Feb 2017 09:34

Is there also an issue for the employee, and do you do SA for them?

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Replying to SteveHa:
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By BMary83
09th Feb 2017 10:43

Yes the personal tax return will also need to be amended.

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By David Heaton
09th Feb 2017 17:59

Make an *unprompted* (ie, tell HMRC before they spot it) disclosure for both the SA and P11D errors and the minimum inaccuracy penalty for SA is 0%. Repair the SA return and pay the extra tax as a first step. Send a P11D and a corrected P11D(b) and pay the Class 1 using the correct payment reference for 2015-16 contributions. Even if it's classed as careless, HMRC's maximum penalty is 15% of the potential lost revenue, and the penalty should be suspended on request anyway.

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By [email protected]
13th Feb 2017 15:29

Normal practice to send in a late P11D with a covering letter to explain the oversight.

The penalty:--
"You’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HMRC."

https://www.gov.uk/employer-reporting-expenses-benefits/deadlines

Penalties

Non-submission or overdue:

Form P11D(b): £100 per every 50 employees (or part of 50) per month or part month.
Incorrect P11D and P11D(b)returns:

A penalty is based on a % of potential revenue lost according to taxpayer behaviour and degree of culpability or guilt:

100% (deliberate and concealed action)
70% (deliberate but not concealed action)
30% (careless action)
0% (genuine mistake, after taking reasonable care)
Late payment of Class 1A NIC

Non-payment Class 1A NIC: statutory interest charged immediately from 19 July (22nd if paid electronically)

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