Chip Sengravy

I just got one of these, and at the end it says the cash equiv is £2774.

Have I paid this in tax, or have I been taxed on it?

Andy McCord

P11D
Your employer uses form P11D to tell HMRC about the value of any 'benefits in kind' they've given you during the tax year. This means benefits or expenses that effectively increase your income, like:

a company car
private medical insurance
interest-free loans
Your employer will only declare them if you've earned at least £8,500 in the year, including the value of the benefits. They will work out how much each benefit is worth, record it on the form and send it to HMRC. They'll also give you a copy, which you'll need for your records or if you complete a tax return.

If you apply for a loan or mortgage, banks and building societies will accept form P11D as proof of extra income.

Lee247

Your tax code will reduce/increase depending on whether you have an L code or K code, by that much, Chip, therefore paying more tax. Don't worry you haven't paid that amount

Chip Sengravy

It's all very confusing! There's alot to be said for cash money, straight into your pocket

Whats the difference between L&K ?

auto scooby

The worry is that you will be paying the tax on this benefit from April 08. Which is when the tax code that will be re-calculated based on this additional taxable income is established.

If you are a 40% tax payer, and this is the first instance of a benefit in kind, then you can expect your net pay to be reduced by something in the region of £90 squid.

Lee247

Most codes "L" are say, 522, yours would reduce by 277, new code 345L, meaning you can earn 3450pa before you start to pay tax.
"K" is added to your wages, say you earned 10K, and your 522 allowance was used up with health insurance, company car, fuel, mobile etc, If that lot came to more than 5220 per year, say it was 6000, your new code would be K78 and your wage for tax purposes would become 10780,

auto scooby

A k code is applied where taxable benefits in the year are greater than your tax allowance.

Thus if your tax allowance is 5225 (basic personal 2007/08) allowance. and your taxable benefits additional to your salary equate to say 6225 then your tax code would be K100 assuming no other tax unpaid is being collected through your tax code.

Effectively this would mean that £1000 is added to your total gross pay, and tax is deducted on this increased amount. Which is an ****.

There are a number of other tax codes Website of the UK government : Directgov gives you more guidance

auto scooby

Snap

Lee247

nice one AS

Chip Sengravy

Please remeber in your replies, you are speaking to a financial idiot. I'll just pay it

Devildog

Edited for accuracy Mike

Lee247

Rats, you got in before me

Chip Sengravy

I suppose