Employer medical insurance deducted from tax free allowance

[FluffyFluffy]

Im struggling to find the answer to this on HMRC website and the phone help line keeps cutting my call off ... so though I'd do a sanity check here

My employer gives me medical insurance

My new tax code from HMRC deducts the value of the medical insurance benefit from my tax free allowance
All fine

My question is:
Do I still need to declare the value of the medical insurance as a benefit in kind on my Self Assessed form?

Or does the fact that it has 'come off' my tax free allowance mean that I've already paid tax on it?

If I declare it on the self assessment form would I be paying tax twice?

I know this seems like a dumb question but the guidelines I've read don't answer this!

You add it onto your tax return.

Thus more tax owed than if you just had your normal salary.

But as you have it also in your tax code, that extra tax has already been collected each month.

So you owe nothing more! (In theory)

Thanks @burnoutbabe so in theory if I add it my tax return for transparency, no extra tax will be deducted (because I already had it taken off my tax free allowance)?

Yes

It should be on your p11d anyway as a reminder of amount to include in your tax return.

I’m not sure of the impact of the tax allowance point, I’m no expert and it may answer this point - but check your P11D. In our work, payroll deduct tax as though we are actually paid the cost of the insurance - so I have already been taxed in my pay and do not have to declare on my self assessment. So just double check if that is how yours is done. If not, it will need to be on your self-assessment.

Although you’ve already paid tax on it you have to declare it and can sometimes be stung again for it with the child benefit higher income charge if it takes your taxable income over 50k and I know used to also affect things like tax credits too

If you are an employee and are paid via payroll with PAYE and all that, why are you doing a self-assessment tax return?

On a self assessment tax return the starting point is the standard tax free allowance. So you then need to include your p11D benefit in your tax return so that it gets counted.

That's definitely incorrect.

You may have already paid the tax.

Bit if you don't include it also on your tax return, it would seem like you overpaid tax, and get a refund.
Therefore it must be included in your tax return, along with your salary and tax is then calculated on the total.
Then it's compared to what you have already paid and you should not owe anything extra.

(Your payslip may show it as
Salary £2000
Value of the medical £500
Total to tax £2500
Tax due say £250
But they don't pay you £2,250 as that would be giving you the medical benefit as cash -you had it already as a service -so the £500 taken off too
So you get £1,750 net pay in your bank. (And £500 worth of medical cover provided)

@burnoutbabe curiousgeorge80 is correct if benefits are payrolled.

OP - ask your employer for a P11D - it should have been provided to you by 6 July anyway. Include the benefit on your tax return.

Curiousgeorge80 - your employer runs a payrolled benefits scheme so you do not receive a P11D and the benefit is taxed, as you say, as if it were extra income.

@CuriousGeorge80 are you sure ?

I have employed and self-employed status - and I always declare my medical insurance from my employer as shown on my P11D in the relevant section on my self assessment form - as it states you should do.
I have always had to request a P11D from my employer as they don't issue them as a matter of form - I keep having to remind them I'm also self employed,
However, if you just have emplyee staus, thrn they can just automatically inform HMRC without issuing you with a copy iirc

OP your PAYE code is not an exact science. It uses prior year information to estimate the amount of tax due on your benefits in kind for the following tax year. You need to put the amount shown as taxable on your P11D on your return as there may be more tax due and it contributes to calculating your total income and tax bands/allowances. However the tax deducted at source should cover the tax due on your salary and the benefit in kind assuming the amount in the PAYE code is correct.

You can get a deduction on a P11D if you’ve made a contribution towards a benefit which lowers the amount of a benefit but tax deducted is not shown on a P11D.

CuriousGeorge80's employer uses a payrolled benefit scheme. they are usually run by large employers as they are a faff to register you have to decide before the start of the year that you want to run the scheme

www.gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll#:~:text=Print%20this%20page-,How%20to%20register%20for%20payrolling%20benefits%20and%20expenses,start%20of%20the%20tax%20year.

Also - your employer should provide a p11d if they are not payrolling benefits - strictly by 6 July.