expenses claim - car parking fine?

[TheCyclingProgrammer]

Remember, as an employee of your Ltd Company (or any company) you can claim whatever you want as an expense as long as your employer agrees.

What is important is whether or not that expense payment is BIK and liable for NIC and/or PAYE and whether the company can deduct that expense payment for corporation tax purposes.

In the case of parking fines, I can't find anything specific on the HMRC website but would suggest that it isn't a valid business expense and therefore any claims would be liable to NIC/PAYE.

That being said, HMRC do mention that additional costs arising out of an error on your part whilst on a business journey *are* claimable without any NIC/PAYE being due. The example that HMRC give is where an employee purchases a train ticket for somewhere on the West Coast and then they discover that they actually needed a ticket for somewhere on the East Coast meaning they need to buy a new ticket; both tickets would be claimable without any additional tax being due.

Its up to you whether or not you'd want to try and argue the toss with HMRC that a parking fine constitutes "additional costs due to employee error".

[Alfie]

Per HMRC:

The fine will be the employee's liability if the penalty notice was actually handed to him or her at the time of the offence, or if the employee owns the car. In such circumstances a deduction may be allowed to the employer for the fine paid on behalf of the employee.

But if the notice was fixed to a car owned by the employer, and the employer pays the fine as the registered owner, an employment income charge will not arise to the employee. The fine should then be disallowed in computing the employer's taxable profit. If the employee voluntarily pays a fine in these circumstances, and the employer reimburses it, the employee will be chargeable on the emolument arising. A deduction for the expense may then be allowed to the employer.


http://www.hmrc.gov.uk/manuals/bimmanual/BIM42515.htm

[xoggoth]

That says infraction of the law. Fines by state which assume includes local councils or those acting for them are not deductible. Not so sure if it was a private car park.

[TheCyclingProgrammer]

Per HMRC:

The fine will be the employee's liability if the penalty notice was actually handed to him or her at the time of the offence, or if the employee owns the car. In such circumstances a deduction may be allowed to the employer for the fine paid on behalf of the employee.

But if the notice was fixed to a car owned by the employer, and the employer pays the fine as the registered owner, an employment income charge will not arise to the employee. The fine should then be disallowed in computing the employer's taxable profit. If the employee voluntarily pays a fine in these circumstances, and the employer reimburses it, the employee will be chargeable on the emolument arising. A deduction for the expense may then be allowed to the employer.


http://www.hmrc.gov.uk/manuals/bimmanual/BIM42515.htm

Well done on finding that; it's a nightmare finding stuff on the HMRC website sometimes.

[Paddy]

JHC!!!



I wish this f***ing government would make up their mind. The law was changed sometime in the 1990s and parking fines no longer were fines but became civil penalties. They changed the law in order to make the burden of proof much less than was need in a criminal court.

"Civil proceedings
A revenue payment, in settlement of a civil action arising out of a trade, may be allowed as a trading deduction where the allegations were neither admitted nor proved (see Golder v Great Boulder Proprietary Goldmines Ltd [1952] 33TC75). Where liability was admitted or proved, a deduction may be allowed where the payment was restitutionary, but not if it was punitive. "

IE: A parking penalty is not a fine and therefore an can be offset against tax.