Ltd Co paying for Private Healthcare Treatment
Discussion
I'm a Director of a Ltd company and currently covered by company funded healthcare insurance (all declared on P11D).
Due to a longwinded timing and logistical issue, I need treatment by a consultant not covered by our scheme, but unsure on most efficient way to fund.
1, Out of my own pocket
2, Consultant invoice my company and declare on P11D (is this allowed)?
3, Directors loan
TIA
Due to a longwinded timing and logistical issue, I need treatment by a consultant not covered by our scheme, but unsure on most efficient way to fund.
1, Out of my own pocket
2, Consultant invoice my company and declare on P11D (is this allowed)?
3, Directors loan
TIA
What do you mean by "allowed"?
If a company pays a personal bill on behalf of an employee or director, the cost becomes a normal "Remuneration" cost as far as the company is concerned and the company will receive an offset against its profit for Corporation Tax purposes. In other words, its Corporation tax liability will be reduced.
However, the director will have to pay personal Income Tax on the value of the benefit he is receiving from the company at whatever his top rate of Income Tax happens to be.
An example -
A company pays personal medical insurance for a director and it costs the company £1,000 per annum.
That £1,000 cost is a legitimate company expense and will reduce the company's Corporation Tax bill by £200 (£1,000 @ 20%)
The individual director will be charged Income Tax on the £1,000 Benefit he receives from the company If he is a 20% taxpayer, it will cost his [personally £200 Income Tax.
If he is a Higher Rate taxpayer,. it will cost him £400.
If he is a top rate taxpayer it will cost him £450.
So, unless he is a basic rate taxpayer, taking the Benefit in Kind will cost him more overall.
Some Benefits ion Kind are also subject to Employer's National Insurance charges.
If a company pays a personal bill on behalf of an employee or director, the cost becomes a normal "Remuneration" cost as far as the company is concerned and the company will receive an offset against its profit for Corporation Tax purposes. In other words, its Corporation tax liability will be reduced.
However, the director will have to pay personal Income Tax on the value of the benefit he is receiving from the company at whatever his top rate of Income Tax happens to be.
An example -
A company pays personal medical insurance for a director and it costs the company £1,000 per annum.
That £1,000 cost is a legitimate company expense and will reduce the company's Corporation Tax bill by £200 (£1,000 @ 20%)
The individual director will be charged Income Tax on the £1,000 Benefit he receives from the company If he is a 20% taxpayer, it will cost his [personally £200 Income Tax.
If he is a Higher Rate taxpayer,. it will cost him £400.
If he is a top rate taxpayer it will cost him £450.
So, unless he is a basic rate taxpayer, taking the Benefit in Kind will cost him more overall.
Some Benefits ion Kind are also subject to Employer's National Insurance charges.
My response was a question, not an answer.
I find thes posts a little odd as if you need to ask then ask your Accountant, you pay them for the advice and receive an answer that is covered by indemnity and correct qualifications.
The answer above seems informed and answers the question...my reply was questioning if it was possible.
I guess the basic premise is that IF you could efficiently run every invoice you ever receive through a ltd co then why would you not do it....you cannot put bills through for your personal car, just charge mileage...that's what I meant by allowed. I.e if I have. Late co and my car needs a new engine, does it work to have the garage invoice my ltd co. And then have this as a benefit in kind and be better off than just paying the bill myself.
I find thes posts a little odd as if you need to ask then ask your Accountant, you pay them for the advice and receive an answer that is covered by indemnity and correct qualifications.
The answer above seems informed and answers the question...my reply was questioning if it was possible.
I guess the basic premise is that IF you could efficiently run every invoice you ever receive through a ltd co then why would you not do it....you cannot put bills through for your personal car, just charge mileage...that's what I meant by allowed. I.e if I have. Late co and my car needs a new engine, does it work to have the garage invoice my ltd co. And then have this as a benefit in kind and be better off than just paying the bill myself.
Eric Mc said:
What do you mean by "allowed"?
If a company pays a personal bill on behalf of an employee or director, the cost becomes a normal "Remuneration" cost as far as the company is concerned and the company will receive an offset against its profit for Corporation Tax purposes. In other words, its Corporation tax liability will be reduced.
However, the director will have to pay personal Income Tax on the value of the benefit he is receiving from the company at whatever his top rate of Income Tax happens to be.
An example -
A company pays personal medical insurance for a director and it costs the company £1,000 per annum.
That £1,000 cost is a legitimate company expense and will reduce the company's Corporation Tax bill by £200 (£1,000 @ 20%)
The individual director will be charged Income Tax on the £1,000 Benefit he receives from the company If he is a 20% taxpayer, it will cost his [personally £200 Income Tax.
If he is a Higher Rate taxpayer,. it will cost him £400.
If he is a top rate taxpayer it will cost him £450.
So, unless he is a basic rate taxpayer, taking the Benefit in Kind will cost him more overall.
Some Benefits ion Kind are also subject to Employer's National Insurance charges.
Thanks Eric, very helpful indeed and much appreciated.If a company pays a personal bill on behalf of an employee or director, the cost becomes a normal "Remuneration" cost as far as the company is concerned and the company will receive an offset against its profit for Corporation Tax purposes. In other words, its Corporation tax liability will be reduced.
However, the director will have to pay personal Income Tax on the value of the benefit he is receiving from the company at whatever his top rate of Income Tax happens to be.
An example -
A company pays personal medical insurance for a director and it costs the company £1,000 per annum.
That £1,000 cost is a legitimate company expense and will reduce the company's Corporation Tax bill by £200 (£1,000 @ 20%)
The individual director will be charged Income Tax on the £1,000 Benefit he receives from the company If he is a 20% taxpayer, it will cost his [personally £200 Income Tax.
If he is a Higher Rate taxpayer,. it will cost him £400.
If he is a top rate taxpayer it will cost him £450.
So, unless he is a basic rate taxpayer, taking the Benefit in Kind will cost him more overall.
Some Benefits ion Kind are also subject to Employer's National Insurance charges.
I think I will foot the bill myself otherwise I'm going to get screwed as a higher rate tax payer.
Gassing Station | Business | Top of Page | What's New | My Stuff