Reading this forum I'm sure there's someone with some knowledge on such matters, because it's the first time I've ever had to deal with BIK and I don't.
In January 2019 I took out a gym membership through my employer's salary sacrifice scheme. I understood it would offer a small saving over buying directly from the gym due to reducing my gross salary (by £28.73pm) and therefore paying less tax/NI. I also upgraded my Medicash package from the 'free' Level 1 to Level 2 at a cost of £4.93pm.
The only other times I've used salary sacrifice were in previous employment to buy a bike and extra holidays. My gross wage was simply reduced and there was nothing more complicated going on.
However, my gym membership and Level 2 Medicash have been recorded as 'BIK' and 'Medical Insurance' and I've just received a letter from the tax man saying I owe them £86.40. From what I can work out this is much more than any saving I am making compared to simply buying the gym membership direct.
I thought the idea was to reduce my salary to save me money (admittedly just a few quid pm). But what's actually happened is the tax man has increased my gross salary by £344 (Gym BIK) + £79 (Medicash) = £423 (£35.25 per month) so I'm paying more (tax).
Am I missing something?
In January 2019 I took out a gym membership through my employer's salary sacrifice scheme. I understood it would offer a small saving over buying directly from the gym due to reducing my gross salary (by £28.73pm) and therefore paying less tax/NI. I also upgraded my Medicash package from the 'free' Level 1 to Level 2 at a cost of £4.93pm.
The only other times I've used salary sacrifice were in previous employment to buy a bike and extra holidays. My gross wage was simply reduced and there was nothing more complicated going on.
However, my gym membership and Level 2 Medicash have been recorded as 'BIK' and 'Medical Insurance' and I've just received a letter from the tax man saying I owe them £86.40. From what I can work out this is much more than any saving I am making compared to simply buying the gym membership direct.
I thought the idea was to reduce my salary to save me money (admittedly just a few quid pm). But what's actually happened is the tax man has increased my gross salary by £344 (Gym BIK) + £79 (Medicash) = £423 (£35.25 per month) so I'm paying more (tax).
Am I missing something?
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