P11D question 'Expenses payments made to, or on behalf of, the employee

[Tomo1971]

I know this aint contracting related but thought id ask the panel if I may.

Have just recieved a demand from HMRC to pay some £323 to them as a result of my 2008-09 self assesment.

I was employed during this time but was receiving SA forms until 2009. I had 2 employments in this period.

I have just looked back at the original tax calculation (form SA302) and it lists my income and then 'plus benifits and expenses received' of £1613.

I can see that the £1613 is made up from £1359.63 which is on my form p11d for that year under the heading 'N Travelling and subsistence payments (except mileage allowance payments for own car). This relates to my first employment of that year.

I can also see that the remaining £253 is from my second employment. £253 + £1360 = 1613.

My question is, as far as I remember, these expenses paid to me were in relation to me been in hotels and for food while away from home and on company business. They would only allow me to claim back genuine expenses and only for hotels and food upto a maximum of approx £55/night. How can I be taxed on this figure? It wasnt a perk at all?

I did have a company van at this time, but was 100% business only, drove it to site and back again, no personal use at all (and its not mentioned on the p11d anywhere that i had a vehicle).

Now, if i can get this £1359.63 knocked off my SA for that year then my tax due to them will be £51.

Yes, I should of thought about this back then but I just 'assumed' that it was right and said that they could take this £323 from my PAYE tax code. They havnt done that and now want payment in March for the £323.

Any advice appreciated.

Steve

[xoggoth]

You should not be taxed on items in box N which is normally for valid business expenses reimbursed. I got my tax code reduced by that amount. Neither should there be any tax if a van is wholly used for business or if personal use is very minor.

I assume the P11D was filled in by your employers but it may be that the fault was in your tax return. The P11D expenses should have been entered in two places, as expenses incurred and expenses reimbursed. Can't recall the specific boxes but it should all cancel out.

Maybe just write clarifying things as you have here.

[Clippy]

You should not be taxed on items in box N which is normally for valid business expenses reimbursed. I got my tax code reduced by that amount. Neither should there be any tax if a van is wholly used for business or if personal use is very minor.

I assume the P11D was filled in by your employers but it may be that the fault was in your tax return. The P11D expenses should have been entered in two places, as expenses incurred and expenses reimbursed. Can't recall the specific boxes but it should all cancel out.

Maybe just write clarifying things as you have here.

Doesn't seem to make a difference - certainly, not in my case.

HMRC regularly do this for expenses I have incurred wholly and exclusively for business use by deducting it from my tax code.

I then ask my accountant to sort it out - they contact HMRC who then issue an amended (correct) tax coding notice.

To the OP, I think you are best paying the tax due now and then claiming a refund.

Before claiming a refund, you will need to contact HMRC requesting they amend your 2008 - 09 tax code as the expenses were incurred wholly and exclusively for business purposes - they won't be able to issue an amended tax coding notice but should be able to update their records and make a note of who you speak to.

For future reference, you really should check your PAYE Tax Coding Notice when received as it prevents hassle like this occurring in the first place and is much easier to amend, if necessary, when you are actually in the relevant tax year rather than once it has passed.

[Nixon Williams]

If you complete a Tax Return each year then any PAYE coding errors should be corrected when the tax return is completed. You may suffer a cash flow difference but the overall tax bill should be the same.

If you did not complete a tax return for 2008/09 then you would need to make a claim to HMRC to state that these expenses were incurred for business etc, these will then be removed from the tax calculation. Your accountant should be able to sort this for you.

One of the main errors we see when people have completed their own tax return is a failure to claim that items on the P11d were for business.

Remember that not all P11d items can be deducted, the main ones being cars, medical insurance and beneficial loans.

Alan

[Tomo1971]

Thanks for the help folks.

Spoke to the SA helpline and they said id not entered the same figure into box17 which then cancelled out the figure in the other box. I need to write to them explaining this and all will be good and in the meantime pay the £51 tax due that relates to my second employment that year.

Steve