A new twist in the HMRC P11D/expenses cockup

[TheCyclingProgrammer]

I'm sure quite a few people on here have ended up in a situation where they have submitted their P11D containing genuine business expenses (such as business calls and travel) and then made a relief claim on their self assessment, but as a result of the delay between the two being processed, received a new coding notice from HMRC deducting the expenses from their taxable allowance.

We'll I've had one almost every year (they finally stopped deducting my travel costs last year but decided to deduct my £20 in business calls instead) and this year was no exception. As it was £20 I wasn't going to bother ringing them as it didn't affect me (salary still below adjusted allowance).

But this year I got a new one. A letter this morning claiming I had underpaid tax in the 2012/13 year to the tune of £60 and that they had recently sent me a P800 with how they calculated this. Except I've not received a P800. Also not sure how somebody who submits their self assessment each year on time (did mine last April) could even get one.

Logged online to check my account and nothing there. Nothing owed. Great, now I've got to sit on hold to HMRC in their busiest period to get this resolved.

In the end, I was told the underpaid amount was from the 2011/12 year, contradicting the letter but that I shouldn't have got a P800 anyway. After more time on hold it seems that they have calculated the underpaid tax based in some expenses payments even though all expense payments have been claimed as genuine business expenses on my SA.

Bottom line: I don't owe any tax, not to worry about it and she also fixed my tax code (again). But what a ball ache.

Has this happened to anyone else?

Given the faff I seem to have every year, I'm strongly considering applying for a dispensation to leave travel and phone expenses off my P11D. Has anybody had any luck getting one? I would have thought 5 years of P11Ds with amounts that result in no tax due would help my case.

[Clare@InTouch]

We apply for dispensations for all our clients, and we get 90% of them. There is one particular office that always seems to refuse due to a random member of staff who doesn't ever approve them, but otherwise they generally go through fine.

[TheCyclingProgrammer]

We apply for dispensations for all our clients, and we get 90% of them. There is one particular office that always seems to refuse due to a random member of staff who doesn't ever approve them, but otherwise they generally go through fine.

Got to be worth a go then. I seem to remember reading that there needs to be a system in place for expense claims to be independently verified by somebody - I assume my accountant can play this role?

[Clare@InTouch]

Absolutely fine.

[DirtyDog]

Given the faff I seem to have every year, I'm strongly considering applying for a dispensation to leave travel and phone expenses off my P11D. Has anybody had any luck getting one? I would have thought 5 years of P11Ds with amounts that result in no tax due would help my case.

I applied and got one quite early on.

Got to be worth a go then. I seem to remember reading that there needs to be a system in place for expense claims to be independently verified by somebody - I assume my accountant can play this role?

I have a system - I check the expenses for the other directors, and they check mine. We have a paper form to complete, which is then totalled and signed by the reviewing director.

[Jessica@WhiteFieldTax]

HMRC shouldn't be issuing P800s for Self Assessment cases. They know that, but can't always suppress it in their systems.

I do a some voluntary work for low income pensioners, and it causes chaos there.

[TheCyclingProgrammer]

OK, so I've applied for a dispensation for all business travel and phone calls. Lets see what happens. How long do dispensations normally take to come through, and will they apply for the current tax year or from the next one onwards?

[DaveB]

<usual HMRC Cock Up>

Given the faff I seem to have every year, I'm strongly considering applying for a dispensation to leave travel and phone expenses off my P11D. Has anybody had any luck getting one? I would have thought 5 years of P11Ds with amounts that result in no tax due would help my case.

Applied for one when I set up the Ltd. Came through without any further questions. Took about 6 weeks IIRC.

[Clare@InTouch]

OK, so I've applied for a dispensation for all business travel and phone calls. Lets see what happens. How long do dispensations normally take to come through, and will they apply for the current tax year or from the next one onwards?

They usually backdate to the start of the current tax year, although they can start it at the date you apply for it if they wish. As you're so close to the end of the tax year that may well be the case.

[TheCyclingProgrammer]

Just had a call from HMRC confirming that the letter/P800 was issued in error and that it had been cancelled and that I definitely did not owe any tax, so at least that's that dealt with!