News0 min ago
Can my employer offer BUPA healthcare as a salary sacrifice scheme?
3 Answers
Hi All
Can anyone advise me if my employer offer BUPA healthcare as a salary sacrifice scheme so that the deduction from my pay is from the gross rather than net salary?
Many thanks
Lilly
Can anyone advise me if my employer offer BUPA healthcare as a salary sacrifice scheme so that the deduction from my pay is from the gross rather than net salary?
Many thanks
Lilly
Answers
Best Answer
No best answer has yet been selected by lillythepink. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.I don't see how because it is a taxable perk.
If you agreed to reduce your gross salary by X so your employer could pay X to buy you healthcare, the employer would have to declare the payment on the P11D to HMRC. This would then result on the employer then having to pay employee's NI, employer's NI and your tax on the payment.
The net impact would be zilch.
A good try.
If you agreed to reduce your gross salary by X so your employer could pay X to buy you healthcare, the employer would have to declare the payment on the P11D to HMRC. This would then result on the employer then having to pay employee's NI, employer's NI and your tax on the payment.
The net impact would be zilch.
A good try.
I agree with BM that there is no tax benefit but I understand that employees can save NI.
There's an article (advert) here:
http://www.aspira-ifa...ice-save-tax-and-nics
It says:
"Other non-cash benefits may save on employee national insurance contributions but will still be subject to income tax and employer's national insurance (Class 1A) contributions through the P11D reporting process. Private medical insurance premiums are a good example. These can be paid by the employer and recovered through salary sacrifice. However, a P11D must be completed for the employee and the cost of the benefits would then be taxed. The employee would save on their national insurance contributions, albeit only at the rate of 1% for higher rate taxpayers. "
It's a complex area, and employers need to follow strict rules, and for a higher rate taxpayer the NI saving is only at 1%.
There's an article (advert) here:
http://www.aspira-ifa...ice-save-tax-and-nics
It says:
"Other non-cash benefits may save on employee national insurance contributions but will still be subject to income tax and employer's national insurance (Class 1A) contributions through the P11D reporting process. Private medical insurance premiums are a good example. These can be paid by the employer and recovered through salary sacrifice. However, a P11D must be completed for the employee and the cost of the benefits would then be taxed. The employee would save on their national insurance contributions, albeit only at the rate of 1% for higher rate taxpayers. "
It's a complex area, and employers need to follow strict rules, and for a higher rate taxpayer the NI saving is only at 1%.
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