Expenses / P11d / SA Return

[Scotlet]

Hi All,

Just wanted to check my understanding around expenses and how they sit on the P11D and my SA Return.

I've completed my P11D covering travel (excluding mileage) and home office use. I put the same values in the "cost to you" and "Amount made good" columns showing taxable payment of zero. Is this correct?

If so, can I then say No to "Have you received any taxable benefits" on my SA return (which this earlier response http://forums.contractoruk.com/accou...ms-p11d-3.html seems to suggest)

The reason for my confusion is my accountant also said "remember to claim them back as expenses in your tax return" - my original question was did I need to include some initial expenses on my P11D, the full response being "The initial expenses should not be shown on your P11D, just the travel and use of home office - remember to claim them back as expenses in your tax return." I'd taken this to refer to the P11D expenses, but now I'm wondering have I completed the P11D incorrectly, or have I maybe misunderstood her response.

To answer the first obvious challenge, I would go back to my accountant but she's on holiday until 3rd July so cutting it a little fine if I've got the P11D wrong and have to sort it out. And to answer the other obvious challenge, I didn't apply for a dispensation because no independent check of expenses. I may try for next year but once I've got it sussed it should be plain sailing from here.

Thanks in advance.

[Clare@InTouch]

Hi All,

Just wanted to check my understanding around expenses and how they sit on the P11D and my SA Return.

I've completed my P11D covering travel (excluding mileage) and home office use. I put the same values in the "cost to you" and "Amount made good" columns showing taxable payment of zero. Is this correct?

If so, can I then say No to "Have you received any taxable benefits" on my SA return (which this earlier response http://forums.contractoruk.com/accou...ms-p11d-3.html seems to suggest)

The reason for my confusion is my accountant also said "remember to claim them back as expenses in your tax return" - my original question was did I need to include some initial expenses on my P11D, the full response being "The initial expenses should not be shown on your P11D, just the travel and use of home office - remember to claim them back as expenses in your tax return." I'd taken this to refer to the P11D expenses, but now I'm wondering have I completed the P11D incorrectly, or have I maybe misunderstood her response.

To answer the first obvious challenge, I would go back to my accountant but she's on holiday until 3rd July so cutting it a little fine if I've got the P11D wrong and have to sort it out. And to answer the other obvious challenge, I didn't apply for a dispensation because no independent check of expenses. I may try for next year but once I've got it sussed it should be plain sailing from here.

Thanks in advance.

The expenses should go in Section N, not where you've put them. HMRC will then adjust your tax code as if they are not allowable, so you'll need to call them (after they do so) and tell them to give you your tax code back. You'll then need to add in the same expenses as part of the Employment pages of your tax return.

If you get the P11D and SATR done quickly then one offsets the other and HMRC won't amend your tax code. In practice, that's not always the case though.

(you can make a claim under section 336 for the expenses to be ignored, but if you're doing the whole process yourself you'll probably find it easier just to call HMRC when they adjust your code).

[Scotlet]

Thanks Clare,

It was section N I filled in, but I'd completed both "cost to you" and "Amount made good" showing a taxable payment of zero. Should I just have completed the "cost to you" section, so showing an actual taxable payment, and then on my SA return show both the payment and the expenses, hence netting off to zero there?

[Clare@InTouch]

Thanks Clare,

It was section N I filled in, but I'd completed both "cost to you" and "Amount made good" showing a taxable payment of zero. Should I just have completed the "cost to you" section, so showing an actual taxable payment, and then on my SA return show both the payment and the expenses, hence netting off to zero there?

Yes, just show the Cost to You, and not fill in the other box. It's an allowable expense, so not something you'd have to repay. Then you claim them allowable, via the 336 claim and show on your tax return. A 336 claim can be as simple as writing a letter to HMRC saying that all expenses were wholly and exclusively for the purposes of the trade, as per Section 336 (if you google it you'll come up with some wording on AccountingWeb).

If you get your tax return done quickly after the P11D, there should be no worry about HMRC trying to tax them.

[TheCyclingProgrammer]

If you get the P11D and SATR done quickly then one offsets the other and HMRC won't amend your tax code. In practice, that's not always the case though.

Ah, so that's why HMRC managed to send me a coding notice with the correct tax code this year, for the first time in years. (I submitted my P11D and Self-Assessment on the same day).

[Scotlet]

Thanks again Clare,

Now just to try and get hold of HMRC to tell them my P11D needs to be corrected. Wish me luck!