Company perks could cause tax repayment demands

Advisers have warned that staff whose employers pay for benefits like a company car or health insurance could face demands for repayments.

Experts said the PAYE issues have arisen because of the way the tax authorities treat employee benefits when calculating tax liabilities, the Guardian reported.

The people most likely to be affected are employees who received a new taxable benefit from their employer for the first time during the 2009/10 tax year, and then got a tax refund from HMRC this year.

HM Revenue & Customs said that requests to give back refunds were a normal part of the PAYE system, because final liabilities for a particular tax year are only calculated in the following year.

Mike Warburton,  personal tax expert at Grant Thornton, said: “It’s very unpleasant if you get the nice surprise of a tax refund, then the Revenue turn around and say, sorry, we have to have that repayments.”

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