Reply to: Expenses - company card or own cost and claim?

[AdamPlanUk]

Ok thanks to everyone for your advice I think I know where I stand now. Will be going down the business debit/credit card route then for all genuine expenses.

[malvolio]

I'll say it again. Source of payment makes no difference to P11D reporting.

The HMRC guidance with respect to travel expenses which makes that point clear enough.

For other business expenses, what Jessica said:

Is that consistent enough for you?

And I'll say it again: as long as you stick to genuine business-only expenses paid exclusively from the company's credit card and with no BIKs arising as a result, nobody actually gives a damn.

[Contreras]

OK, so which is right: not reporting expenses you haven't incurred and not been reimbursed for, or not reporting business expenses that are none of your concern? As I said, I know what the rules state and I know what three separate accountants (four if you count Jessica) have said about it.

If you're going to criticise casual advice on a public forum, at least be consistent.

I'll say it again. Source of payment makes no difference to P11D reporting.

The HMRC guidance with respect to travel expenses which makes that point clear enough.

For other business expenses, what Jessica said:

HMRC don't worry about reporting of clearly deductible items be they paid on private or business card

Is that consistent enough for you?

[malvolio]

Wrong.

In fact the HMRC guidance is very clear and says the opposite. Source of payment makes no difference to P11D reporting, and why should it? Without adding that caveat your advice is at best misleading.




Agreed. P11D is a waste of time for genuine business expenses if everyone is honest about what constitutes a genuine business expense! I imagine it could be used to red-flag potential abuse worthy of investigation, but it's a fairly blunt instrument at that.

OK, so which is right: not reporting expenses you haven't incurred and not been reimbursed for, or not reporting business expenses that are none of your concern? As I said, I know what the rules state and I know what three separate accountants (four if you count Jessica) have said about it.

If you're going to criticise casual advice on a public forum, at least be consistent.

[Contreras]

Or Plan B - get a company card, put all wholly and exclusively business expenses on there and ignore personal money completely. Result, no P11D at all... Hector won't care since there is no tax involved either way as long as they are genuine expenses.

Why make life complicated?

Wrong.

In fact the HMRC guidance is very clear and says the opposite. Source of payment makes no difference to P11D reporting, and why should it? Without adding that caveat your advice is at best misleading.

That said my experience over c10k P11D returns and a 0% query rate is that HMRC don't worry about reporting of clearly deductible items be they paid on private or business card, with or without dispensation: there's no tax lost so why would they?

Agreed. P11D is a waste of time for genuine business expenses if everyone is honest about what constitutes a genuine business expense! I imagine it could be used to red-flag potential abuse worthy of investigation, but it's a fairly blunt instrument at that.

[malvolio]

IMV that still has to go on P11D if you take a strict interpretation of the rules:



That said my experience over c10k P11D returns and a 0% query rate is that HMRC don't worry about reporting of clearly deductible items be they paid on private or business card, with or without dispensation: there's no tax lost so why would they?

I saw today that the Office of Tax Simplification has recommended along the same lines recently.

Precisely. My accountant and two others have said the same thing; it's a zero sum so while the rules are clear, nobody is going to worry about it as long as you stick to pure business expenses only. I've never seen the logic in spending my money on company business.

[Jessica@WhiteFieldTax]

Or Plan B - get a company card, put all wholly and exclusively business expenses on there and ignore personal money completely. Result, no P11D at all... Hector won't care since there is no tax involved either way as long as they are genuine expenses.

Why make life complicated?

IMV that still has to go on P11D if you take a strict interpretation of the rules:

C Vouchers and credit cards
Enter the total of:
• the cost to you of providing any vouchers
(including season tickets) which can be
exchanged for money, goods or services
• any extra cost to you in providing the
money, goods or services for which the
vouchers are exchanged
• all expenses and other payments met by
credit cards you provided, except
– expenses directly in connection with the
car(s) at section F
– expenses more appropriate to section N.
Do not include any vouchers, such as cash vouchers, which have suffered tax under PAYE (see part B above).

That said my experience over c10k P11D returns and a 0% query rate is that HMRC don't worry about reporting of clearly deductible items be they paid on private or business card, with or without dispensation: there's no tax lost so why would they?

I saw today that the Office of Tax Simplification has recommended along the same lines recently.

[Jessica@WhiteFieldTax]

Sounds like a good opportunity to get a credit card that gives you points/cashback and start collecting IMO

^yep. Good idea.

[malvolio]

Or Plan B - get a company card, put all wholly and exclusively business expenses on there and ignore personal money completely. Result, no P11D at all... Hector won't care since there is no tax involved either way as long as they are genuine expenses.

Why make life complicated?

[SueEllen]

Plus you should just apply for a dispensation IMO. Takes minutes to apply then no need to worry about P11D anymore (or rather, no need for your accountant to worry )

Thanks for the reminder. I have to get another one.

[captainham]

Plus you should just apply for a dispensation IMO. Takes minutes to apply then no need to worry about P11D anymore (or rather, no need for your accountant to worry )

[Platypus]

So with them included on my p11d I would still need to pay the tax on them?

No, because they are refunded business expenses, they are not income. There's somewhere else on your tax return where you enter the same figure to cancel out P11D benefits. Your accountant will know this and do this for you.

[AdamPlanUk]

Have done the credit card but a personal not business one (hence me using my funds at the moment. Points=prizes

So with them included on my p11d I would still need to pay the tax on them? Excuse my ignorance will be doing my first ever p11d shortly.

[TheCyclingProgrammer]

You can do this but for things like travel and subsistence you'll still need to report them on your P11D.

[northernladuk]

Sounds like a good opportunity to get a credit card that gives you points/cashback and start collecting IMO