Ken Voller Tax Business Salt Mill Barn Old Salisbury Lane Romsey SO51 0GD
Registered as a Fellow with the Association of Taxation Technicians as a member in practice
2014/15 Forms P11D Guidance for Consideration of Declaration of Expenses and Benefits
*
1)
Declarations are, in the main, being filed electronically, either using H M Revenue & Customs (HMRC) or third-party software. A copy of a form P11D follows this introduction but facsimiles of this can be found here 2014/15 P11D Form I will not be referring to a particular section of the form, but the principles for completion remain the same as they have for many years.
2)
Forms P11D are required for Employees paid at a rate of £8,500 or more per annum, and Directors*. HMRC’s initial guidance to P11Ds can be found here 2014/15 P11D HMRC Guidance
3)
As indicated above, I am not indicating the appropriate section of the form P11D for the item under consideration. However, I will indicate a likely charge to Class 1A National Insurance Contributions (NIC) that may be payable to HMRC for items marked “1A”. Certain items may already be chargeable to NIC under another Class and great care must be taken when considering the items for NIC purposes.
4)
This guide, although extensive, should not be regarded as an exhaustive list of all expenses/benefits to be declared. Circumstances between Directors/employees vary greatly, and it is the responsibility of all employers/company officers to consider each case carefully and ensure returns are fully and accurately completed.
5)
Further information is available from Booklet 480 that is contained on GOV.UK website here Booklet 480 (2015) Expenses and benefits - A tax guide I have included other website links where available
6)
Claims for genuine business expenses will have to be made by the employees/directors personally, so that, when completing forms P11D, business and personal expenses should be separately identified. In most circumstances a “Dispensation” should be requested using form P11DX and, if granted, will reduce the annual compliance work. It is strongly recommended that Dispensations are sought wherever possible.
7)
The financial penalties for getting things wrong are increasingly onerous making it more important to consider the position carefully before making any declarations and then making the declarations on a timely basis.
8)
Please call Ken Voller, on 07914 762 375 if you have any specific queries concerning benefits, expenses or the completion of forms P11D. Ken also deals with employment Tax/NIC and PAYE matters generally. Including “Shadow” directors under S67 ITEPA 2003 – this is any person in accordance with whose instructions the directors are accustomed to act (other than a person who is merely a professional adviser)
Tel: 0835 130 6380
Mobile: 07914 762 375
e-mail: ken@tax-business.co.uk
Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above
Tax-Business
Tax and Business advisory services
Ken Voller, Tax Business Ltd, Salt Mill Barn, Old Salisbury Lane, Romsey, SO51 0GD Registered with the Association of Taxation Technicians as a member in practice Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above
Tax-Business
Tax and Business advisory services
Ken Voller, Tax Business Ltd, Salt Mill Barn, Old Salisbury Lane, Romsey, SO51 0GD Registered with the Association of Taxation Technicians as a member in practice Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above
Tax-Business
Tax and Business advisory services
Assets transferred or provided: (a) Details must be given of assets transferred to employees. (b)
Payments:
Vouchers:
Details must be given of assets (other than assets covered elsewhere on the form, eg, cars) owned by the company and used by employees.
1A 1A
Does the company meet any personal liabilities of the employees (e.g. domestic bills, Tax and National Insurance?) Are any vouchers provided (including season tickets, luncheon vouchers, Childcare vouchers etc.) which can be exchanged for money, goods or services provided for employees? If so, give full details.
Living Accommodation: Accommodation of any description, such as a company flat (including details of maintenance and running costs, and furniture etc provided).
1A
Refer to P11D Working Sheet 1 Living accommodation 2014-15 which is available to assist with this.
Mileage Allowances etc: If the employee owns the car, is he reimbursed for the costs of any business mileage? In the case of employee-owned cars, the employee should produce supporting evidence when making a claim for reimbursement of any business fuel. If mileage rates are paid within HMRC tax-free limits then no declaration needed – only excess payments, ie, any profit element, are declarable. Refer to P11D Working Sheet 6 Mileage allowances etc 2014-15 which is available to assist with this.
Motor Cars provided by Employer: Scale charges are based on a percentage determined by the CO2 emissions for cars registered on or after 1 January 1998. There are varying rules for the treatment of older cars or vehicles without approved CO2 emission figures. The type of fuel (petrol/diesel/electric, etc) will also affect the calculations.
1A
Refer to P11D Working Sheet 2 Car and car fuel benefit 2014-15 which is available to assist with this
(a) (b) (c) (d) (e)
The following matters must also be considered:Are there any employees for whom more than one car is provided? Is private use of company cars reimbursed by employees? If so, is VAT accounted for on the receipts? The price of cars includes the Original List Price plus accessories fitted at the time of manufacture/purchase. It also includes accessories fitted after purchase. Does the company providing the car pay for all the fuel used (including that for private motoring)? If not, are checks made to ensure that only business fuel is being paid for? The fuel type will affect the charge; is the fuel petrol, diesel or other?
Ken Voller, Tax Business Ltd, Salt Mill Barn, Old Salisbury Lane, Romsey, SO51 0GD Registered with the Association of Taxation Technicians as a member in practice Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above
1A 1A 1A 1A 1A
Tax-Business
Tax and Business advisory services
Vans: Is there any private use of company vans, or other commercial vehicles? Is private mileage monitored for each vehicle?
1A
Refer to P11D Working Sheet 3 Van benefit 2014-15 which is available to assist with this.
Beneficial loans: Give details of any loans made to employees, and also details of interest (if any) payable thereon.
1A
Have any loans been waived? If the total outstanding on all loans is not more than £10,000*, then no beneficial loan charge arises. *This threshold was £5,000 up to 5 April 2014. Refer to P11D Working Sheet 4 Interest-free etc loans 2014-15 which is available to assist with beneficial loan computations. Beneficial Interest rates are, normally, determined on an annual basis and can be found here Beneficial loan arrangements: HMRC official rates
Private Medical Treatment or insurance: Private medical insurance (e.g. BUPA, PPP etc), or payment of private medical bills or medical check-ups. Relocation and Removal Expenses: Give full details of the expenses reimbursed. “Qualifying” costs up to £8,000 are exempt and included in section J. Other costs, qualifying or otherwise are to be included in sections M or N as appropriate. Refer to P11D Working Sheet 5 Relocation expenses etc 2014-15 which is available to assist with this.
Services provided to employees: Are any services (including legal, accountancy and other professional advice) supplied to employees either free or below market value? If so, give full details.
1A
1A (May be Class 1 NIC due)
1A
Other Items: The cost of subscriptions (e.g. to clubs or trade or professional bodies) paid on behalf of employees. Certain subscriptions or fees to professional bodies may not attract any National Insurance liability.
1A (May be Class 1 NIC due)
Educational assistance for the employee or his family, or scholarship schemes.
1A
Nursery places provided for children of the employee.
1A
Are any other benefits of any description provided for the employees (e.g. holidays, prizes for passing examinations, Christmas hampers, and household expenses?). Certain ‘Trivial Benefits’ may be exempted from Tax/NIC.
1A
Ken Voller, Tax Business Ltd, Salt Mill Barn, Old Salisbury Lane, Romsey, SO51 0GD Registered with the Association of Taxation Technicians as a member in practice Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above
Tax-Business
Tax and Business advisory services
Expenses Payments: Travelling and Subsistence Allowances: (a) Show all allowances paid to employees when working away from home on company business, including:(i) Round sum allowance paid for each night of absence. (ii)
Payments the employee is personally required to pay for, such as the cost of accommodation etc. and which are reimbursed.
(iii)
Payments via company credit cards for hotel bills etc.
(iv)
Payments for hotels or travel expenses invoiced to the company direct.
(v)
All overseas costs, including overseas conference costs.
(b)
If wives are allowed to accompany their husbands on business trips, the costs borne by the company must be declared.
(c)
The cost of all rail season tickets, or travel vouchers of any description, supplied to employees must be declared.
Entertainment Expenses: For employees incurring entertainment expenses, the following amounts must be included:(a)
The cost of any meals, drinks etc. paid for by the employee and claimed as a reimbursement from the company.
(b)
Petty cash provided to enable the employee to make any payments required. (Are any surplus amounts returned afterwards? If not, does this constitute a round sum allowance?)
(c)
Payments by company credit cards.
(d)
Payment through accounts at selected restaurants, hotels etc. at which employees can sign for meals provided.
Note
All entertainment costs should be recorded for Corporation Tax computation purposes. "Entertainment" does not include subsistence where there is, for instance, no element of customer entertaining.
Ken Voller, Tax Business Ltd, Salt Mill Barn, Old Salisbury Lane, Romsey, SO51 0GD Registered with the Association of Taxation Technicians as a member in practice Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above
Tax-Business
Tax and Business advisory services
Other Expenses (examples): (a) Work carried out at the employee's home, and payment of wages of domestic staff. (b) (c)
Are car parking (or any other motoring) fines paid or reimbursed by the company? For employees garaging company cars, are any garage allowances paid? Are car wash allowances paid?
(d)
Are any employees or directors provided with drivers?
(e)
Clothes provided to employees, including receptionists and messengers. Details of cleaning costs incurred by the company.
(f)
Arrangements for paying home telephone accounts, including rentals.
Round Sum Allowances: Are any round sum expense allowances paid (e.g. a car, clothing, meals, use of room at home as office, or entertaining allowance)? Usually, unless a dispensation has been granted, these amounts should be treated as "pay" for PAYE purposes, i.e. Tax and National Insurance should be deducted at source. In certain circumstances a general expense allowance wholly for business purposes may be allowed by HMRC to not be treated as pay for PAYE purposes.
General:
(a)
No details need be entered in respect of which a dispensation from HMRC is currently in force. Do any such dispensations require updating?
(b)
In addition to matters specifically dealt with above, care must be taken concerning other employer declarations that may be needed. For example, details must always be given under the following headings:(i)
Are untaxed suggestion awards made? If so, give details.
(ii)
Are untaxed long-service awards made to employees?
(iii)
Redundancy or termination payments made to employees?
(c)
All amounts shown on form P11D must be VAT inclusive.
(d)
Expense payment and benefits to employees/directors include all such payments made via a company credit card, made available to a specific employee/director.
(e)
Costs paid by the company but charged to a loan/current account need not be shown on forms P11D.
Please note that this leaflet is written as a general guide and is not a substitute for professional advice. You are recommended to obtain specific professional advice before you take or refrain from taking any action. Whilst every care and attention has been taken to ensure the accuracy of the contents of this leaflet, the information is intended for general guidance only and reflects the current law and practice. Neither Ken Voller nor Tax Business Ltd can be held responsible for any loss or additional liabilities arising due to the taking or not taking action based on this leaflet.
Ken Voller, Tax Business Ltd, Salt Mill Barn, Old Salisbury Lane, Romsey, SO51 0GD Registered with the Association of Taxation Technicians as a member in practice Tax Business is the trading name of Tax Business Ltd, a Limited Company – Registration number 07496432. The Registered Office is indicated above