Benefit I kind question (a little different)

[zimmerman]

I've searched the internet, with no luck!

If you earn under the 40% threshold so pay company car tax at 20%, what happens if you receive a one-off (end of year) bonus payment that puts you in line for the 40% rate. What happens to the benefit in kind- do you suddenly owe HMRC money dating back to the start of the tax year as if the BIK is calculated on 40%?

I also think I read that the 40% threshold is coming down to £35,001.00 from april?!

[Eric Mc]

Benefits in Kind are charged at your top rate of Income Tax.

If your combined salary, bonuses and Benefit in Kind are sufficient to put you into the Higher Rate Tax bracket, you will be obliged to pay Income Tax at 40% on some, if not all, of the Benefit in Kind.

[zimmerman]

Bugger!

Thanks for response.

[Eric Mc]

It's up to your employer tyo ensure that the correct information is properly communicatred to HMRC.

You need to check your PAYE Coding Notices to make sure that both your employer AND HMRC have got it right. If they haven't - YOU will be the one who has to find any underpaid tax.