Travel expenses rail

[Contreras]

No, it's well worth paying for them directly from YourCo and ignoring the P11D altogether...

Only if you (and your accountant) wish to ignore the very clear HMRC guidance.

It's not ignoring the rules if the money never comes anywhere near you.

Oh yes it is.

[TheCyclingProgrammer]

It's not ignoring the rules if the money never comes anywhere near you.

If YourCo pays for your business travel/subsistence/accomodation expenses directly, they still have to be reported on the P11D. The HMRC rules are quite clear about this. I outlined this in my very first post in this thread. You can read it on the HMRC link I provided - its there in black and white.

Business travel: you provide, pay for or reimburse
<snip>
What to report, what to pay
For company directors or employees earning at a rate of £8,500 or more per year:
report on form P11D unless you have a dispensation covering this item
you have no tax or NICs to pay

To not report these expenses is to "ignore the rules". That you weren't reimbursed is irrelevant.

I'm not saying that its the worst thing in the world; there is no tax loss overall. But if we're talking about doing things by the book, then that means reporting them on the P11D and claiming the expenses on your tax return, or getting a dispensation to avoid the hassle.

And dispensations for fixed-rate payment of standardised expenses are about to be looked at quite carefully, since HMRC has noticed that some people aren't using them as intended...
The fewer levers I provide to HMRC the better as far as I'm concerned. Telling them I'm claiming expenses I may not have fully incurred doesn't seem that smart a move for the sake of, erm..., well, doing nothing at all and letting MyCo look after its own costs. .

You've lost me a bit here - you've gone off on a bit of a tangent. Nobody here is talking about fixed/scale-rate payments. I'm talking about applying for a reporting dispensation for expenses that are actually incurred, nothing more.

http://www.hmrc.gov.uk/payerti/exb/s...ensation.htm#1

You can apply for one here:

https://online.hmrc.gov.uk/shortform...ww.hmrc.gov.uk

Note that you have to specify whether or not you are paying for/reimbursing actual costs or using agreed scale rates. My dispensation covers the former.

[malvolio]

You could, but if you're going to ignore the rules anyway what does it matter if they've been paid directly or reimbursed? Both are supposed to be reported.

I'm sure we all agree it's a fairly pointless exercise but better to try and do things properly if you can. Get a dispensation (it takes 5 minutes to fill out the form and I got mine approved in about 2 weeks) and you don't have to worry about it.

It's not ignoring the rules if the money never comes anywhere near you. And dispensations for fixed-rate payment of standardised expenses are about to be looked at quite carefully, since HMRC has noticed that some people aren't using them as intended...

The fewer levers I provide to HMRC the better as far as I'm concerned. Telling them I'm claiming expenses I may not have fully incurred doesn't seem that smart a move for the sake of, erm..., well, doing nothing at all and letting MyCo look after its own costs.

YMMV of course.

[TheCyclingProgrammer]

No, it's well worth paying for them directly from YourCo and ignoring the P11D altogether...

You could, but if you're going to ignore the rules anyway what does it matter if they've been paid directly or reimbursed? Both are supposed to be reported.

I'm sure we all agree it's a fairly pointless exercise but better to try and do things properly if you can. Get a dispensation (it takes 5 minutes to fill out the form and I got mine approved in about 2 weeks) and you don't have to worry about it.

[malvolio]

The main problem is that until HMRC receive your SA, then as far as they are concerned the stuff in box N on your P11D is taxable as they don't know what the figure is for. It could be business travel, it could be private travel.

This often results in a tax code adjustment which then has to be reversed once you have done your SA. I believe there is another form that can be used to notify of valid business expenses to try and prevent this but I'm not sure what it's called.

For this reason, if all your P11D expenses are only business travel and related subsistence/accomodation and business calls, it's well worth applying for a dispensation.

No, it's well worth paying for them directly from YourCo and ignoring the P11D altogether...

[TheCyclingProgrammer]

The reason "why" is because HMRC say so.

Presumably it allows them to get a handle on non-business travel being paid through the company, those all expenses paid conference trips to the Caribean for example. If the amounts were excessive perhaps, it could be a flag for closer inspection, maybe.

The P11D amounts will also need to go on your personal self assesment, twice. First to declare received benefit from the company and second to declare the same amount as being incurred for business, so there is no tax due.

The main problem is that until HMRC receive your SA, then as far as they are concerned the stuff in box N on your P11D is taxable as they don't know what the figure is for. It could be business travel, it could be private travel.

This often results in a tax code adjustment which then has to be reversed once you have done your SA. I believe there is another form that can be used to notify of valid business expenses to try and prevent this but I'm not sure what it's called.

For this reason, if all your P11D expenses are only business travel and related subsistence/accomodation and business calls, it's well worth applying for a dispensation.

[Contreras]

Hi
I understand that they need to be on my p11d form. My question was why.
I also did a search but didn't find anything that stated why.
Anyway you have answered my question.
Thanks mark

The reason "why" is because HMRC say so.

Presumably it allows them to get a handle on non-business travel being paid through the company, those all expenses paid conference trips to the Caribean for example. If the amounts were excessive perhaps, it could be a flag for closer inspection, maybe.

The P11D amounts will also need to go on your personal self assesment, twice. First to declare received benefit from the company and second to declare the same amount as being incurred for business, so there is no tax due.

[isplumm]

Hi
I understand that they need to be on my p11d form. My question was why.
I also did a search but didn't find anything that stated why.
Anyway you have answered my question.
Thanks mark

[TheCyclingProgrammer]

Yes, it would need to go on your P11D. I'm surprised you couldn't find your answer by searching...it's been discussed on here many times before.

If your accountant was implying that paying it directly from the company account would mean not having to report it on your P11D then I'm afraid they are wrong. Business travel expenses are reportable whether they are paid for directly or reimbursed to the employee. The only time they aren't is if they are exempt (like mileage payments up to the prescribed limits) or you have a dispensation.

See:
HM Revenue & Customs: Travel - general

You are correct that business travel including travel to a temporary workplace (subject to the 24 month rule of course) is an allowable business expense.

However due to the weird way the expenses rules work, the payments from the employer are strictly treated as a taxable benefit on the employee which is why they are reported on the P11D. You need to claim relief for them separately as a business expense on your tax return.

There are plans to try and simplify this in the future by removing the need to report expenses that will ultimately not be taxed but who knows when that will happen.

You could also apply for a dispensation but I'd suggest HMRC wouldn't be inclined to give one of you're new to this. I have one but I've been in business over 5 years.

[isplumm]

Hi

I have my own ltd company & have been in my current contract for just over a year.

I normally drive so normally claim mileage at the standard rates.

But I am now looking to go by train as I can get a direct train from my company office to my client office far quicker than driving.

I assumed that I would just pay for the train fare myself & then claim it back from my company.

This I can do but my accountant has suggested that I then must declare this on my p11d form.

This seems odd to me as this is a wholly business expense.

Could someone explain why it needs to go my p11d form.

Thanks mark