Self Assessment, P11D & Business Expenses

[ASB]

HMRC notes on how to complete your 2011 tax return, Employment Pages http://www.hmrc.gov.uk/worksheets/sa102-notes.pdf

Box 16
Expenses payments received and balancing charges
These fall into three main areas:
• travelling and subsistence – include amounts for fares, hotels, meals, and
so on including travel between home and a permanent workplace. Do not
include reimbursements of expenses in connection with a company car or
van. If your employer pays you an allowance for using your own vehicle
on company business, see the notes for boxes 12 and 17

Thanks Clare, at least I got my relief claim in the right box.


Box 12
Vouchers, credit cards and excess mileage allowance
If your employer pays you a mileage allowance (box 12 in section E of the
P11D) for using your own car, van, motorcycle or cycle for work, you only
have to pay tax on it if you are paid more than your business mileage
multiplied by the appropriate rate for each kind of vehicle

Box 12 in Section E of the P11D states - Amount of mileage allowance.....in excess of maximum exempt amounts. This indicates that mileage shouldn't be on the P11D at all unless it's over the approved rates.

P11D guide from HMRC states Enter the excess over and above the approved amount.... http://www.hmrc.gov.uk/guidance/p11dguide.pdf

Box 17 on the Employment section allows you to claim underpaid mileage expenses.

Thanks Clare, at least I got my relief claim in the right box.

[Clare@InTouch]

HMRC notes on how to complete your 2011 tax return, Employment Pages http://www.hmrc.gov.uk/worksheets/sa102-notes.pdf

Box 16
Expenses payments received and balancing charges
These fall into three main areas:
• travelling and subsistence – include amounts for fares, hotels, meals, and
so on including travel between home and a permanent workplace. Do not
include reimbursements of expenses in connection with a company car or
van. If your employer pays you an allowance for using your own vehicle
on company business, see the notes for boxes 12 and 17


Box 12
Vouchers, credit cards and excess mileage allowance
If your employer pays you a mileage allowance (box 12 in section E of the
P11D) for using your own car, van, motorcycle or cycle for work, you only
have to pay tax on it if you are paid more than your business mileage
multiplied by the appropriate rate for each kind of vehicle

Box 12 in Section E of the P11D states - Amount of mileage allowance.....in excess of maximum exempt amounts. This indicates that mileage shouldn't be on the P11D at all unless it's over the approved rates.

P11D guide from HMRC states Enter the excess over and above the approved amount.... http://www.hmrc.gov.uk/guidance/p11dguide.pdf

Box 17 on the Employment section allows you to claim underpaid mileage expenses.

[ASB]

How the Employer and the Employee handle it go hand in hand on this, and mileage at approved rates doesn't need to be disclosed regardless of whether the company has a dispensation or not. Excess mileage does, but there's a box (box 12) specifically for that on the Employment pages.

I'll find a link, hold on........

Ah yes, box 12. So all this AMAPS thing changed some things. Out of interest then, in my case I get a minuscule mileage rate (cash instead of company car). Say it's 10p and I do 5,000 miles. I get paid £500. However my claim (employment related costs) is 5,000 @ 40p = 2,000. So I am due 1,500 relief.

Where do I now put this on my S/E return - does it still go in Box 17? or am I going to have to file an amendment to my return

Of course I haven't ruled out the possibility that the changes are simply designed to ensure that people in my situation get stiched up by not getting full relief on business mileage.

[Clare@InTouch]

Surely that link is for what an employER is supposed to report not how the employee is supposed to handle in on their self assessment.

For the latter if no dispensation:

I would expect the OP to enter £6,000 (the actual amount received) in box 16 of the employment page. In box 17 they would enter the mileage claim at the approved rate (this would appear to be £6,000 from what the OP has said). The effect of this is not to increase the taxable income (or to increase the taxable income by the amount paid in excess of approved rates or reduce it by the amount less than the approved rates).

If there is a dispensation:

I would expect the OP To enter 0 in box 16 (this being the amount in excess of the approved rates - which means there shouldn't be a dispensation anyway). In box 17 I would expect the OP to enter the amount by which their reimbursement was "short" of the approved rates. Also from the OP this would seem to be zero.

Of course ICBW.

How the Employer and the Employee handle it go hand in hand on this, and mileage at approved rates doesn't need to be disclosed regardless of whether the company has a dispensation or not. Excess mileage does, but there's a box (box 12) specifically for that on the Employment pages.

I'll find a link, hold on........

[ASB]

If you were paid mileage at approved HMRC rates then it shouldn't be on your P11D, it's only if you were paid in excess of the 40p/25p that it's a P11D item HM Revenue & Customs: Mileage expenses for business travel in employees? own vehicles

If you were paid £6,000 over and above the approved rates you'd add the value onto your employment page and it would indeed be subject to tax.

Surely that link is for what an employER is supposed to report not how the employee is supposed to handle in on their self assessment.

For the latter if no dispensation:

I would expect the OP to enter £6,000 (the actual amount received) in box 16 of the employment page. In box 17 they would enter the mileage claim at the approved rate (this would appear to be £6,000 from what the OP has said). The effect of this is not to increase the taxable income (or to increase the taxable income by the amount paid in excess of approved rates or reduce it by the amount less than the approved rates).

If there is a dispensation:

I would expect the OP To enter 0 in box 16 (this being the amount in excess of the approved rates - which means there shouldn't be a dispensation anyway). In box 17 I would expect the OP to enter the amount by which their reimbursement was "short" of the approved rates. Also from the OP this would seem to be zero.

Of course ICBW.

[tbrain]

Mileage was paid at approved HMRC rates, therefore a little confused as to why it was on my P11D.

It's also definitely not £6,000 over and above the approved rates / limits either.

Who's the best port of call for understanding exactly what makes up the figure on the P11D? Ex-employer, accountant?

[xoggoth]

If the MAPs you pay are below the approved amount for the tax year:
•you have no reporting requirements
•you have no tax to pay to HMRC

http://www.hmrc.gov.uk/paye/exb/a-z/...e-expenses.htm

[Clare@InTouch]

If you were paid mileage at approved HMRC rates then it shouldn't be on your P11D, it's only if you were paid in excess of the 40p/25p that it's a P11D item HM Revenue & Customs: Mileage expenses for business travel in employees? own vehicles

If you were paid £6,000 over and above the approved rates you'd add the value onto your employment page and it would indeed be subject to tax.

[prozak]

from the memory - mileage reimbursement is not required on the form.

I think a read of the P11d guide would confirm this.

But I might be wrong.

[tbrain]

Hi there,

I started my own limited company in September 2010, and so I am currently filling in my self-assessment for 2010/11.

Between April 2011 & September 2011, I worked as a permanent employee and incurred almost £6000 of business travel expenses, all mileage for using my personal car to travel to other office locations for meetings / workshops etc.

When filling in my self assessment, it obviously shows two employers. For the former, I have filled in the taxable benefits and expenses section inserting the £6000 figure into the expenses payments received and balancing charges field (as per P11D).

Obviously, the self assessment then suggests that tax is due on these benefits and expenses although surely this is incorrect?

Therefore, should I;

i) not add them into self assessment?
ii) is there another means of tax neutralising these on the self assessment?
iii) or do I actually have to pay the tax on this?!

Thanks!