Poor service accountant

[Clippy]

If there is going to be a large volume of small value expenditure on a monthly basis it may be easier to account for this if you paid for the items personally and detail them on a personal expense claim form each month to reclaim them from the company. This reduces the paperwork burden as they will already be categorised on the form so you can retain the necessary receipts at home.

Thanks for the quick response. Using the personal account for rail tickets/lunch etc and getting reimbursed seems a practical approach. I shall contact you/Adele if i have any more queries.

A great idea in principle but the reality is more of a pain in the proverbial.

The expenses would need to be declared on your P11D which isn't a problem in itself.

The problem arises when the P11D lands on the desk of the obligatory HMRC jobsworth who looks at the value of the expenses and decides they are all Benefits in Kind (BiK), despite being clearly told they were wholly, necessarily and exclusively for business purposes, and duly reduces your tax code for the next year by this amount.

Cue gnashing of teeth on your part whilst you or your accountant writes to HMRC and waits several months for them to sort this out.

I expense everything personally as I don't incur that many expenses so, hence, don't really have a need for a company credit card and every year, without fail, HMRC categorise my expenses as BiK's - they even dug up an expense figure from several years ago and used that against my tax code for a year when I never worked and hence never incurred any expenses. Seriously, wtf!!

This happens to me every year and has been for several years and is a right pain to sort out so, IMHO, I'd think twice before going down this path.

[Martin at NixonWilliams]

A great idea in principle but the reality is more of a pain in the proverbial.

The expenses would need to be declared on your P11D which isn't a problem in itself.

The problem arises when the P11D lands on the desk of the obligatory HMRC jobsworth who looks at the value of the expenses and decides they are all Benefits in Kind (BiK), despite being clearly told they were wholly, necessarily and exclusively for business purposes, and duly reduces your tax code for the next year by this amount.

Cue gnashing of teeth on your part whilst you or your accountant writes to HMRC and waits several months for them to sort this out.

I expense everything personally as I don't incur that many expenses so, hence, don't really have a need for a company credit card and every year, without fail, HMRC categorise my expenses as BiK's - they even dug up an expense figure from several years ago and used that against my tax code for a year when I never worked and hence never incurred any expenses. Seriously, wtf!!

This happens to me every year and has been for several years and is a right pain to sort out so, IMHO, I'd think twice before going down this path.

I have to agree that it is a pain that HMRC seem to randomly change tax codes for no apparent reason when the P11d and tax return have been completed correctly; however, this only seems to happen for a small proportion of our clients.

To resolve this, a phone call to the HMRC helpline normally does the job as they can change the tax code over the phone to remove the 'benefits' and reissue a standard tax code.

In the very unlikely event that you cannot get the 'benefits' removed then you may overpay tax via PAYE during the year but this will be all recalculated when completing the personal tax return at the yearend.

Martin