Could someone please advise me on how to use HMRC benchmark scale rates for travel reimbursement? Scenario is contractor operating from a Ltd Company (PSC).
I've done some background reading and my understanding is as follows:
In order to use the benchmark rates you must first apply for dispensation with HMRC via a P11DX. Once agreed with HMRC, you can then reimburse the employee these rates for each trip (anything paid in excess would be deemed a benefit in kind to declare on P11D?). You don't need to keep receipts for this method but you need to prove that there was a business trip that took place.
If you don't apply via the P11DX, you must only reimburse what can be vouched for via receipts.
Is my understanding above correct?
If so, secondary question... if we get the dispensation in place to use the benchmark scale rates, can we then pick and choose which method is used per trip? I.e. sometimes the director might incur higher meal expenses than the benchmark scale rates, so can we reimburse actual cost incurred in this case? Or once the dispensation is in place, must we take this approach for every trip?
Please can you do an intro - we always ask newbies.
Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, who is your MLR with, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.
Also please add your first name so that it appears under the signature bar on your posts?! (Edit profile --->signatures)
I'm ACA qualified and ICAEW is my MLR. I have experience in practice (mainly accounts prep with a little exposure to tax) but currently working in industry and have been for about 5 years. I've recently been looking into picking up some private clients to do bookkeeping, statutory accounts prep, tax returns etc. - MLR, PII, practicing certificate is all sorted. Currently I'm trying to educate myself on common scenarios that may come up so doing a lot of background reading.
Anything else you'd like to know feel free to ask :)
Hi Andrew
Another phrase I will steal from Joanne (Cheshire on here) - never ever ever rely on HMRC guidance. They get it wrong a lot. Rely only on the Law.
(I say theoretical, a friend (not client) has asked me broadly about this and I'm trying to get a full understanding of the topic etc.)
Thank you
Remember your ethics - ie not dealing with friends. Not signing them up is worse than giving advice to friends as non clients. PII claim in waiting.
The o/s Q remains - the travel factor. Rules changed. Ignore that old link you dug up. Never look at old tax links from 12m+. Travel is key. Follow the travel rules, then follow subsistence.
(Not much time for theoretical questions at mo, v.v.v.busy)
