I work for a boarding school where staff are entitled to a discount on school fees if their child is accepted into the school. Some staff pay this indirectly whereas others have a deduction from their salary to pay the fees. The deduction is from their net salary (not salary sacrifice). Would the amount of discount be classed as a taxable benefit and therefore reported on a P11D?

Arthur Weller replies:
In a famous 1992 House of Lords case Pepper v Hart it was decided that the provision of education to the children of staff is definitely a benefit in kind that must be declared on a P11D. See www.hmrc.gov.uk/manuals/eimanual/EIM21110.htm. However the Court decided that the amount of the benefit was the marginal additional expense that it cost the school to provide for that extra child, taking into account that it was anyway providing for members of the public, and not as the Revenue wanted to contend, a proper proportion of the full costs of providing an education to all pupils at the school.