Tax on AA cover & BUPA

[fairy!]

After my 3 month probation period at work, I have the option of free AA cover & BUPA. However, I've heard that I'll get taxed on these... can anyone advise roughly how much??

[KJN]

All depends on what rate of tax you pay i.e. if you are a high earner you will be taxed at 40% and this will be the rate you will have to pay for the benefits Free BUPA cover lets say cost �80 per month, so you will have to declare and your company will inform the tax office of this benfefits which will cost you �32 per month not bad for BUPA cover I would have thought? Most unearned income (benefits taxed at this rate so AA same principle.

[Oneeyedvic]

It is known as a "Benefit in Kind" and will be taxed as your normal rate as KJN says. It will all come out on the form P11D which will be sent to the revenue by your employers.

Also worth mentioning - any holidays or other prizes that you win at work are also taxable - I even had to sign for a bottle of Jack Daniels that I won so that the tax man could have his money!

[stevie21]

Wait a minute - you get "free" BUPA cover and have to pay �32 tax on it? You pay this and not the employer?
Have I lost track of the logic here already? (I hope so!)

Should I declare the bottle of hideously cheap booze I was given in work the other day? I'm not sure if this was a reward for my usual great performance or an admission that I need it to get through my working day dealing with logic such as the above.

[NiceCupOfTea]

After reading Oneeyedvic's post, I got to thinking. If they're taxing people on prizes won at work, do they tax people for the Christmas Dinners some employers pay for? (I'm going to have to phone up my mates who still work in the Rev....)

[kags]

Employers are allowed to provide an annual dinner/function for employees without there being a tax charge, so long as the amount spent per head is reasonable.

[Oneeyedvic]

In theory yes you should be taxed for your Christmas dinner.

As a practical matter, I will sometimes treat my customers to meals which I pay for and claim back through my company.

After speaking to my accountant, this should go down on my P11D as a benefit in kind and then be calimed back when I do my tax return. This means that I don't actually pay any tax on it. Must confess that I don't really undersand it, but trust that my accountant does.

With regards bottles of wine - yes, your company shouldl make you sign for it - it is a benefit in kind.

You used to be able to get travellers cheques as prizes without paying tax but I think they closed that loophole. You can still get gift vouchers though without paying tax on them.

[kags]

Further to my last post, the annual limit for expenditure on functions is �150 per head, so I doubt many employers exceed this!

[Oneeyedvic]

oops - I bow to kags knowledge on Christams dinners

[kags]

oneeyedvic - your busines entertaining will normally not be allowable as an expense to the company, so the company will pay tax on it - this is why you aren't taxed, otherwise there would be a double charge. Having said that, the adding back of entertaining expenses in company accounts for tax purposes is a bit of a grey area, and I doubt it it is ever done strictly correctly!

[kags]

ps - your logic was correct re the Christmas dinners - they should be taxable under the strict legislation but there is a Revenue Concession.

[Oneeyedvic]

Also realised that mobile phones are also given special dispensation ( I think). I know that you don't get taxed on making personal calls from a company mobile

[funnywebsite]

I am not sure about AA cover but I used to work for a company with free health care and there wasn't that much tax to pay. I cannot remember exactly how much but it wasn't a lot. Just ask them, they should know how much tax you will have to pay.