24 November 2015 Amanda Darley, Head of Operations and Engagement
Advisory firms are reporting that HMRC has changed its view on the treatment of NHS surcharges paid by employers on behalf of employees for tax and NICs purposes. As the surcharge is payable upfront as part of the visa process, HMRC has now decided that the costs of the NHS surcharge can be attached to the visa costs and treated as a travel facility just like airfares, train fares, etc.
So where the surcharge can be attributed to a specific journey into the UK from overseas, a deduction will be appropriate for the employee and this can be extended to the accompanying or visiting spouse, civil partner and children. Such costs are therefore disregarded for both Class 1 and Class 1A NICs. But if there is no actual journey associated with the surcharge, e.g. it relates to an extension of the visa to allow the employee to stay in the UK, any cost of the surcharge met by the employer will be treated as general earnings and liable to tax and NICs.