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Previously on "Tax bill re expenses vs benefits - What has accountant/I got wrong"

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  • Jessica@WhiteFieldTax
    replied
    Originally posted by PTP View Post
    Found a brown envelope when I got home today

    They are saying that £1,200 is owed on £6,000 benefits in kind


    On the tax return we put:

    Benefits from your employment – use your form P11D (or equivalent information)
    Q16: Expenses payments received and balancing charges £6,000

    Employment Expenses
    Q17: Business travel and subsistence expenses £6,000



    So why are they still seeing it as a benefit and not an expense?
    Depends on the nature of the brown envelope.

    By "tax return" I presume you mean Self Assessment return? In which case that should have calculated itself.

    The brown envelope you have now may, given the time of year, be a tax code, and HMRC Tax Code Team may be assuming a similar level of expenses as per last years P11D without being aware it was all fully claimed as expense on Self Assessment.

    Its the outworking of an antiquated tax system that politicians keep tinkering with rather than making it fit for purpose.

    Your accountants should be able to interpret the bit of paper by type / date and tell you where the issue is.

    I often say to clients if you get an unexpected tax bill, 9 out of 10 times its wrong.

    Leave a comment:


  • TheCyclingProgrammer
    replied
    Originally posted by b r View Post
    tbh Any letter I get from HMRC is scanned and emailed to our Accountants asking for their opinion.

    Normally get an email back giving a reason plus saying that we'll sort it and let you know.
    As somebody said already, it's due to the timing difference between your P11D being submitted and them receiving your tax return.

    As I'm sure you know, anything reported on your P11D is treated by default as a benefit, unless you claim an equivalent deduction on your tax return to cancel them out. So HMRC receives the P11D and adjusts your tax code, but it all works out once your tax return is processed.

    I have had success in the past getting HMRC to cancel the coding notice, however, in the end, I got fed up with it happening each year and applied for a dispensation for travel, subsistence, accommodation and telephone costs.

    The good news is that from this tax year onwards, these kinds of expenses are covered by exemptions and no longer need to be reported on your P11D in most circumstances so make sure that is the case after April when your P11D is prepared for 16/17. It should be blank unless you've genuinely had some BIKs.

    Leave a comment:


  • b r
    replied
    tbh Any letter I get from HMRC is scanned and emailed to our Accountants asking for their opinion.

    Normally get an email back giving a reason plus saying that we'll sort it and let you know.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by RSoles View Post
    The difficult part seems to be getting HMRC to read that.

    Leave a comment:


  • RSoles
    replied
    Originally posted by northernladuk View Post
    The difficult part seems to be getting HMRC to read that.

    Leave a comment:


  • vwdan
    replied
    Potentially nothing - this happened to me a couple of times, due to them processing the P11D details prior to the Self Assessment. Give them a call in the first instance or speak to your accountant.

    Leave a comment:


  • RSoles
    replied
    Because they're morons.
    Happens to me every year.
    Have a word with your accountants and they'll sort it out.

    Leave a comment:


  • northernladuk
    replied
    This help?

    https://www.gov.uk/government/upload...uide_12_15.pdf

    Leave a comment:


  • Tax bill re expenses vs benefits - What has accountant/I got wrong

    Found a brown envelope when I got home today

    They are saying that £1,200 is owed on £6,000 benefits in kind


    On the tax return we put:

    Benefits from your employment – use your form P11D (or equivalent information)
    Q16: Expenses payments received and balancing charges £6,000

    Employment Expenses
    Q17: Business travel and subsistence expenses £6,000



    So why are they still seeing it as a benefit and not an expense?

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