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Claiming the employment allowance (EA)
Benefits Act 1992, which can be found here: https://ow.ly/AU9y50YQXRW. If you haven’t claimed EA and think you may be eligible, you can make a claim at any point in the tax year. You’re also able to claim for the previous four tax years. Further guidance can be found here: https://ow.ly/WNWR50YQXUA. Extending benefits to the family members of employees and Directors Q: A company Director wishes to add his wife to the medical scheme paid for by the business. Firstly, is this allowed? And secondly, would it be processed as a benefit in kind (BiK) for the Director? A: This is allowed. And yes, a benefit provided to a member of a Director’s / employee’s family would be charged against the Director / employee in question. Therefore, you would payroll that benefit against the Director in respect of his wife or report it on form P11D if you’re not yet registered to payroll benefits. Meet the team
Further information can be found in Section 201(3) of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003: https://ow.ly/KJUq50YQY3r, and the following Employment Income Manual (EIM): https://ow.ly/LOTU50YQY71. Correct treatment of a company car for an ex-employee Q: An ex-employee who retired before 6 April 1998 is entitled to receive a company car until he dies. He’s now over 90 years old and still has a valid driving licence. My predecessor was told that an annual P11D doesn’t need to be completed for him, as there’s no liability to income tax. Is this correct? We’re looking to buy him out of this benefit with a large cash payment. What would be the correct tax treatment for this payment? A: The following EIM and legislation confirms this approach is correct: https:// ow.ly/FlYL50YQYc6. Although the legislation is clear on this, we would advise the employer to contact HM Revenue and Customs
Q: Could this company claim the EA? There are two employees – the first one is a Director paid above the National Insurance (NI) secondary threshold and the second is an employee paid above the NI secondary threshold, who is under 21 and on NI category letter M. A: NI category letter M isn’t exempt and there’s still a liability to pay a secondary Class 1 contribution. Although the contribution is zero, 0% is still a rate and this is confirmed in Section 9A(6) of the Social Security Contributions and
Is it permissible to extend benefits to the family members of employees or Directors?
Chevonne Wild MCIPPdip Payroll Advisory Team Leader
Marie Bennett MCIPPdip Payroll Advisory Officer
Monica Blajut MCIPPdip Payroll Advisory Officer
Leanne Sinclair MCIPPdip Payroll Advisory Officer
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