Hi, if director bought safety boots from company bank account for himself to wear in construction sites as the company is construction company how to record on P11D?I looked at A to Z expenses on HMRC website, I would assume that safety boots should be regarded the same as protective clothing using at workplace. But it explains where to record when you give or make available from your assets. But this case is that one item was bought. Would be right to record on section N as other expense?
I work for a client that buys quite a bit of protective clothing for himself and his employees due to the nature of their business. The I never included any of this on a P11D as Mark said they are necessary for the performance of his duties on sites, not a benefit in kind.
But why HMRC asked me to put hotel expenses for director on P11D that were totally for business purpose?I cannot understand this point, you as a director have to stay in hotel for couple of weeks due to business purpose and later on you have to pay tax as it is regarded as benefit despite the fact that it was totally for business. I contacted HMRC and they asked me to write this on section N of P11D and later on director had to pay tax through self-assessment.
If the director earns more than £8,500 a year then you are obliged to report this on a P11D, but if the costs were purely for business purposes then there will be no tax or NI to pay. It may have been that the costs reimbursed were more than he actually paid? (In which case it would be counted as earnings and should have been added to PAYE)
just a quick addendum to your post. There's no lower limit for directors, the £8,500 only applies to employee's.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
On this page:- http://www.hmrc.gov.uk/paye/exb/overview/forms.htm#3 it says that you "use P11d for almost all directors, but must use P9d if all the following factors apply" point number 1 is "they earn at a rate of less than £8,500 a year". Is this the only time this applies then?
I am sorry, I am new to this, but looking at HMRC website a to z expenses - travel general expense. It says that for business travel you reimburse - by reimbursing no more than the necessary costs of business travel (includes accommodation), you as an emnployer have to report it on form P11D in section K, B or N (unless you have dispensation but employer does not have), you have no tax or Nic to pay as an employer. It was the same said to me by calling HMRC helpline and when it was recorded director had to pay tax on this benefit through self-assessment. It looks unfair that director has to pay tax personally for things that were totally for business purpose. This is what I wanted to highlight.
My understanding is that it has to go on the P11d as a benefit in kind but you can claim relief under what i think used to be s191 (may now have changed) as was incurred wholly, exclusively and necessarily in the course of the business and therefore the individual doesnt suffer any personal tax liability.
Maybe someone eles can confirm on disagree as been a number of years since did a P11d.
Sorry to start this thread up again but I had a question that I just needed some clarification on.
If a client has received confirmation that they have a P11D Dispensation, can they just reimburse themselves for expenses they pay for or is there another procedure they need to be aware of or following?
Think of a dispensation in the same ways as the mileage allowance.
A record still needs to be kept of everything to back up that only legitimate expenses covered by the dispensation were paid.
That aside currently dispensations are simply omitted from reporting on the P11D.
Not sure yet about the reporting requirements of dispensations once RTI has been implemented... Or for that matter the whole concept of a P11D post April this year (something else I need to read up on!).
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
