Paying Benefit in Kind tax when no longer in receipt of the benefit

[Petrol Pete]

When I left my last employer before starting my own company I received the same letter from the health insurance company . They asked me if I wanted to take over the payments my employer had been making. I showed the level of cover offered to my insurance broker and he said similar cover would cost almost twice as much for a new policy as it had clearly been negotiated by a big company and they could not match it.

I carried on with it for many years after that. Not much use if you are going on to an employer who supplies health insurance but it worked out right for me at the time.

Have you asked if you can take over payment ? or is that not an option ?

 

[Deleted member 159894]

I wouldn't expect them to refuse to provide a P45 when the legal requirement is to provide one, but there we are and hence my nervousness.

Anyway, back to the question I asked.

You stated that I will get a tax rebate in April, and I'm trying to understand how you think this will happen.

It was a fully employer funded benefit, so I didn't pay any tax via PAYE in-year: it all gets sorted out via self assessment (and if I do nothing, a big tax bill on my BIK/P11D value). I'm trying to understand in advance of April what my options are going to be if my employer does not provide a corrected P11D.

Because if they don't (and I might not know this until after the end of the tax year), then it will impact what I need to do this tax year to make additional pension contributions at the P11D value and avoid a 50% effective tax rate.

Can I rely on my evidence to HMRC?

Or will HMRC take the P11D as fact? In which case my only option will be to lobby my ex-employer and try to get them to confirm in advance of April that they will reduce the P11D value.

My bold is the reason that it will be recalculated in April

 

[MrGreedy]

Have you asked if you can take over payment ? or is that not an option ?

Thank you.

Yes, it was good value as it was unlimited claims unlimited value, but alas, no ability to carry it forward with me making the payments. It was a flat 'service terminated' letter.

 

[BTB 500]

I was given the option to continue my medical insurance at a discounted rate, but it was more than I could afford on a pension.

 

[CoopsSA]

The rates of private medical insurance that large corporations negotiate is usually based on the fact that the majority of members don't make a claim and that any surplus balance of fees is carried over to the following year thereby reducing the premium.

 

[st13phil]

The rates of private medical insurance that large corporations negotiate is usually based on the fact that the majority of members don't make a claim and that any surplus balance of fees is carried over to the following year thereby reducing the premium.

Correct. It can work the other way though...

The firm I worked for slimmed down its UK operations and, due to the redundancy costs associated with terminating older employees contracts, many of those "let go" were younger. This had the effect that the company's overall medical insurance claim rate increased and the cost of cover for the employees rocketed to such an extent that younger employees could get equivalent cover for less in the open market.