I am currently in the process of completing the 20/21 P11ds, however I have come across a rather unique situation that I do not how to treat correctly.
The Director's daughter, who also works for the company, took out a student loan to pay for her tuition fees. The course is now complete and she has graduated. The Director has paid off the student loan, as the company sponsored her. The tuition fees ideally should have been invoiced to the organisation directly by the institution. The situation with the loan has now complicated things. How do I enter this on the P11d as a benefit in kind? It was not a loan to the employee by the employer, so it seems inappropriate to use that section. Any advice is greatly appreciated.
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Calculator is referring to a prior thread
https://www.accountingweb.co.uk/any-answers/compulsory-accountancy-bodie...
I assume you are an employee of the company and not an accountant in practice.
You are new
Using Anon is not the right thing to do unless the issue is particularly sensitive and keeping Anon is important. The site does warn you about it saying you are likely to get less helpful replies. By answering you have lifted the veil.
The employer has paid the liability of the employee, a bit like paying the employee's credit card.
Correct, I am an employee and not in practice. Thanks, for the response. Not a situation I have seen before was just looking for advice.
+1
Not a benefit, payment of employee's liability.
A benefit is usually something bought by employer for the benefit of employee. Bupa is a good example.
And another +1.
P11D is for non-cash Benefits in Kind.
This payment may have been made to Student Loan Company, but must be treated as payment to the employee (attracting Tax + NICs for her, and Employer's NICs as well). As such it part of the employer's PAYE responsibilities - and should have been reported under RTI on/before the payment was made. If it wasn't, then it needs to be reported via retrospective corrective submissions - along with payment of the missing Tax & NICs due to HMRC (and probable penalties).
Note: depending on the size of the loan repayment, this may result in employee paying tax on her remaining earnings this year at a higher rate.
A small thought ... you say "The Director has paid off the student loan" - which presumably means the payment wasn't actually made by the company?
If so, then you can scrub all my previous post above (as it's no longer anything to do with the company as employer of the daughter).
However, and fairly obviously, if the Director extracted money from the company in order to be able to personally make the payment ... then his extraction will have to be treated correctly (as PAYE or a dividend or a DLA withdrawal or ...)
If may have been unwise to pay off the loan. Most university graduates (and the course isn't specified in the OP) will never pay off the loan.
There is a lot of advice about this on moneysavingexpert.com
Do you mean a PSA? If so, see https://www.gov.uk/paye-settlement-agreements
"A PAYE Settlement Agreement (PSA) allows you to make one annual payment to cover all the tax and National Insurance due on minor, irregular or impracticable expenses or benefits for your employees."
An outstanding SL is highly unlikely to meet those criteria ... and a PSA doesn't reduce the total bill for employer.
