On Wed, 22 Oct 2003 10:48:34 +0100, Peter Saxton
wrote:



Then your employer got it wrong. Even if the item was taxable as a BIK
this isn't the way the tax is deducted.


I'm not so sure it's wrong. What's happening is the employer ups the
salary a bit. He can do that if he wants to. Makes the PAYE
calculation as normal then takes payment for whatever benefit the
employee has had (Hire car, hotel etc), that's OK as well.


Where it doesn't work (shameless plug) is where the IR try to tax the
benefit at 10 -15x what it costs the employer such as trivial private
use of an essential business car. ;-)

DG

Doesn't the BIK reduce your tax code?

Conventionally yes, but Dave Plowman was talking about the situation
Ca 20 ? years ago.

Nevertheless, just last week my son was awarded £500 of "incentive
vouchers" by his employer (Quite an impressive looking wad!) he won't
pay tax on them, his employer merely grosses up their value, adds it
to his salary and calculates his paye as normal and then makes a
deduction for them. He doesn't file a P11d (or even a tax return) and
there's no BIK.

DG