P11d amount made good: Paid by company, received by employee?

[7specialgems]

I have been querying the amount for "other expenses" on my most recent P11d and why the "amount made good" was for same amount, creating a taxable payment of nil.

So... I always thought that the amount made good was an amount paid by myself back to my company to pay it back for any benefit I may have received from it and on which otherwise PAYE and NIC would be due.

When querying this with my accountant, the reply I received was the other way around:

The ‘amount made good’ figure is the amount made good by your company to you by reimbursing you

Not that I like to challenge professionals in the course of their duties when they know far more about what they are doing than I do, but they are wrong with this, aren't they?

[TheCyclingProgrammer]

I'd be concerned. Your accountant is wrong. "Amount made good" means any money that *you* have reimbursed your company for which is used to offset the taxable benefit.

Example: YourCo pays your monthly gym membership of £20, which is a taxable BIK. You give them £10 each month towards this. Your P11D would have £20 in the appropriate box and £10 in "amount made good" and you'd be taxed on the balance.

It can also include amounts that have had tax deducted already via PAYE.

This is what HMRC's on P11D guide says:

Amount made good or from which tax has been deducted
In boxes with this heading on the form P11D enter any amounts which have been made good by the director or employee and/or from which tax has been deducted under PAYE. You will need to make a corresponding adjustment to the total benefits reported on form P11D(b) if you enter an amount from which tax has been deducted under PAYE where the benefit is liable to Class 1A NICs.

It does *not* mean what YourCo has paid you. Assuming your expenses being reported have full tax relief available, this is not given by nilling out the amounts in the "amount made good" box, its cancelled out by entering the amount into the "expense payments" and "business expense" boxes on your self assessment.

Who is your accountant? Very concerning that they'd get such a simple thing wrong. I have read that some accountants (on AccountingWeb mainly) use the "amount made good" box to cancel out genuine business expenses and save the need to do the double entry on the self-assessment but this is wrong. The correct way to avoid having to do this is to apply for a reporting dispensation.

[7specialgems]

I have read that some accountants (on AccountingWeb mainly) use the "amount made good" box to cancel out genuine business expenses and save the need to do the double entry on the self-assessment but this is wrong.

This is what I think is happening. Is this an offence?

The total that my accountant has come up with is the grand total of all business expenses (including those paid directly from the company coffers), less those for mileage and for accountancy fees.

[Contreras]

This is what I think is happening. Is this an offence?

Dunno. Despite being wrong, if it's a not uncommon practise and there's no tax advantage then maybe HMRC don't care. Personally I think it's sloppy practise for no real saving in effort.

Ask your accountant what, if anything, they expect [you] to put on your SA in relation to the P11D. In theory the figures should be repeated twice on the SA, but not if they are short-circuiting things as above.

The total that my accountant has come up with is the grand total of all business expenses (including those paid directly from the company coffers),

Assuming you mean only business expenses which might carry a personal benefit (e.g. travel & accommodation) then your accountant is correct here. P11D is not a record of expenses paid out by the company to you. It's the nature of expense(s) rather than the source of payment that matters.

less those for mileage and for accountancy fees.

Also correct. Mileage is a statutory allowance. Accountancy fees would only be declared if relating to personal SA.

[7specialgems]

Since other people may use the contents of this thread in the course of their own research, I thought I'd update it following a conversation with my accountant about it.

It turned out that "my" accountant actually isn't qualified and is an administrator (one of several) who each report to the one, sole ACCA qualified accountant in the building, and the accountant has instructed all of the administrators to nil out P11Ds.

When I pressed for a reason why, the answers given were:

1. To avoid confusing tax code notices from HMRC for the following year (easier PAYE accounting for them assuming a usual code in the following tax year)
2. To make it quicker to complete SA returns for their clients by answering the taxable expenses and reclaim questions "no" and "no" to shortcircuit the practice.

It would appear that the net result is the same from HMRC's perspective, that the practice is common place but that it is wrong to complete both the P11d and SA in this way.

[TheCyclingProgrammer]

Personally I'd be telling my accountant to do it properly. Otherwise why stop there? Why not submit a completely nil P11D instead?

The comment about HMRC sending incorrect coding notices is valid however it's easily rectified. Better yet, apply to HMRC for a reporting dispensation and skip the P11D altogether.

The comment about making self assessment easier is nonsense. It's a couple of boxes - one for expense payments, a few for business expenses. Simple.

[7specialgems]

Personally I'd be telling my accountant to do it properly.

I told them to take a walk instead