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Do P11Ds still need to be submitted when no salaries in year?

I have had some clients who are employers but there was no reason to pay a salary to the sole director. If there are expenses paid to a director that would usually go on a P11D does a P11D need to be submitted? I have looked on the 480, P11D and P11D Guide but I can't see any mention of what is needed. Does anybody have a link?

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By BKD
30th May 2012 17:58

Did you actually read the 480?

I only ask because:

"1.7 The benefits code applies to:
Section 67(1) (a) directors and certain other persons in controlling positions whatever their remuneration
"

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30th May 2012 21:51

From first principles I'm going to say yes.

If the owner/manager reimburses himself £10,000 of expenses - even if he can s336 claim them all on his TR - then that's £10K of income. If there is no dispensation in place then that's 10K.

Which is probably what s67(1)(a) is saying.

 

That said, no penalty for late filing / non filing if no class1A due?

Peter, your clever comment recently about saying no the were due on ALL P35s might help although I am not sure of HMRC mechanics, ie if there was one filed in 2010/11 I don't know whether HMRC will automatically expect one now.

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31st May 2012 07:36

Not logical to me

HeavyMetalMike wrote:

From first principles I'm going to say yes.

If the owner/manager reimburses himself £10,000 of expenses - even if he can s336 claim them all on his TR - then that's £10K of income. If there is no dispensation in place then that's 10K.

Which is probably what s67(1)(a) is saying.

 

That said, no penalty for late filing / non filing if no class1A due?

Peter, your clever comment recently about saying no the were due on ALL P35s might help although I am not sure of HMRC mechanics, ie if there was one filed in 2010/11 I don't know whether HMRC will automatically expect one now.

I am under no doubt that if a P35 is filed then P11Ds are needs if there are benefits or expenses paid to a director.

If a "no P35" submission is made then I am aware that HMRC still asks for confirmation whether any P11Ds will be submitted.

I can split my limited company clients into three categories:

1 An employer scheme and a P35 is required,

2 An employer scheme and no P35 is required, and

3 No employer scheme

If a director has reportable expenses then what is the logic of requiring them to be submitted in the case of 2 but not 3?

I am aware of the argument that tax isn't always logical.

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31st May 2012 07:25

Yes, I read it.

BKD wrote:

I only ask because:

"1.7 The benefits code applies to:
Section 67(1) (a) directors and certain other persons in controlling positions whatever their remuneration
"

Yes, I read it. Even the P11D uses practically the same words. I understand the logic of directors being subject to the P11D legislation when any wages, benefits or expense payments have been made to any director/employee in the tax year.

In the case of benefits or expense payments only I fail to understand the logic of needing to submit P11Ds for a dormant employer scheme but not needing to submit P11Ds in a similar situation when there is not an employer scheme. NB I understand the practicalities of not having an employer reference.

If you have read 480 so comprehensively could you please let know where it indicates that P11Ds are not required when there is not an employers scheme in place?

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By BKD
31st May 2012 12:48

I'm being lazy

petersaxton wrote:

If you have read 480 so comprehensively could you please let know where it indicates that P11Ds are not required when there is not an employers scheme in place?

 

I didn't read 480 comprehensively - I didn't get past 1.7. Perhaps you'd be good enough to direct us to the relevant provision, and I can comment further.

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31st May 2012 08:22

1.7

BKD wrote:

petersaxton wrote:

If you have read 480 so comprehensively could you please let know where it indicates that P11Ds are not required when there is not an employers scheme in place?

I didn't read 480 comprehensively - I didn't get past 1.7. Perhaps you'd be good enough to direct us to the relevant provision, and I can comment further.

It's 1.7. There is no mention of an employer's scheme so if you take it literally it would appear that you need to submit P11Ds whether there is an employers scheme or not. If no wages are paid when there is an employers scheme why is a P11D required but if there is no employers scheme why is a P11D not required?

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By BKD
31st May 2012 09:08

That was my question

petersaxton wrote:

if there is no employers scheme why is a P11D not required?

Where is the authority that says no P11D is required if there is no employers scheme?

 

Whilst we're on the subject of apparent anomalies, why does the 480 (16.7) say that excess mileage payments must be reported on forms P11D and P9D (my emphasis) whereas HMRC's guidance on their website states that no reporting is required where such payments are made to employees earning less than £8.5k (ie P9D employees)?

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31st May 2012 09:32

No employer scheme

BKD wrote:

petersaxton wrote:

if there is no employers scheme why is a P11D not required?

Where is the authority that says no P11D is required if there is no employers scheme?

Exactly! Has anybody ever submitted a P11Ds when there is no employers scheme? I certainly have not.

How would HMRC file any such P11Ds?

 

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By BKD
31st May 2012 09:47

You're not making much sense

Guidance (and legislation) is clear - if you provide any benefits or pay expenses to/for directors then (with certain exceptions) you are required to submit forms P11D. You have stated that there is no requirement to file P11Ds where there is no employer scheme - where is the authority to support that statement?

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By BKD
31st May 2012 15:09

All gone silent?

Hmmmm ......

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31st May 2012 15:33

The anwser is.....

Hi all posters on this subject,

The lack of a PAYE scheme/reference is irrelevant - that's just an HMRC admin issue. Actually when I worked for them we had schemes called "type 8s", so called "director only" schemes. These were set up where the company had no paid workers and so you had a situation like Peter describes. I doubt HMRC have done away with these although they may have changed the name and the way they administer them.

Although it's a useful guide forget the 480 it doesn't have the force of law. The bottom line is there is an obligation to submit P11Ds where benefits or expenses not covered by a dispensation or PSA are provided to directors. If none are provided there's no obligation. I'm sure I could dig out the PAYE reg that deals with "special returns" - but I don't have the time right now. 

 

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By BKD
31st May 2012 17:16

Thanks, Tony

Pretty conclusive, I'd say

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31st May 2012 18:14

Per HMRC

BKD

Sorry for taking so long to get back to the thread but I have had a visit from an guy who had been dealing with problems with my printers, fax and photocopier. I then had to go out and when i got back a client visited.

I phoned HMRC and was told something that casts doubt on Tony's "conclusive" comments.

"The lack of a PAYE scheme/reference is irrelevant - that's just an HMRC admin issue."

I was told by HMRC that they need a PAYE scheme set up even if there are only expense payments.

This means that you don't need a PAYE scheme if you only have payments under the LEL but you do need a PAYE scheme if a director gets reimbursed for one bus journey!

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By BKD
31st May 2012 18:35

That is correct

petersaxton wrote:

This means that you don't need a PAYE scheme if you only have payments under the LEL but you do need a PAYE scheme if a director gets reimbursed for one bus journey!

The rules have always been different for directors, primarily to avoid abuse. Otherwise there would be nothing to prevent a company paying its sole director nothing in cash, but remunerating him with all kinds of valuable benefits, including non-cash assets that could easily be converted into cash. The requirement to submit P11Ds for directors, existing PAYE scheme or not, prevents that kind of abuse, whilst necessarily catching the 'innocent' situations per your example.

I don't share your doubts about Tony's comments. When I said they were conclusive, I was merely referring to his comment about P11ds being required in all cases  - PAYE scheme or not.

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31st May 2012 18:46

PAYE schemes

It does mean that practically every company should have a PAYE scheme. If an accountant prepares the P11Ds for small clients they would need details of all payments up to 5 April very promptly to enable PAYE schemes to be set up and P35s (or nil returns) submitted by 19 May.

"The rules have always been different for directors, primarily to avoid abuse. Otherwise there would be nothing to prevent a company paying its sole director nothing in cash, but remunerating him with all kinds of valuable benefits, including non-cash assets that could easily be converted into cash. The requirement to submit P11Ds for directors, existing PAYE scheme or not, prevents that kind of abuse, whilst necessarily catching the 'innocent' situations per your example."

Wouldn't it be more efficient if P11Ds were only required if benefits were paid to employees/directors and not also for certain reimbursed business expenses as now?

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By BKD
31st May 2012 19:04

One word

petersaxton wrote:

Wouldn't it be more efficient if P11Ds were only required if benefits were paid to employees/directors and not also for certain reimbursed business expenses as now?

"Dispensation"

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31st May 2012 19:42

How?

BKD wrote:

petersaxton wrote:

Wouldn't it be more efficient if P11Ds were only required if benefits were paid to employees/directors and not also for certain reimbursed business expenses as now?

"Dispensation"

How does an accountant know if all reimbursed expenses are included in a dispensation? By checking all payments..

Whether there is a dispensation or not there's not much difference to the work required.

If a P11D was restricted to benefits - which most companies don't pay - there would be a lot less pointless work required.

Hopefully, people will soon realise that a dispensation provides very little practical benefit.

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By BKD
31st May 2012 19:52

?

petersaxton wrote:

Whether there is a dispensation or not there's not much difference to the work required.

You ain't doin' it right if that's the case

petersaxton wrote:

Hopefully, people will soon realise that a dispensation provides very little practical benefit.

I disagree 100%

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31st May 2012 19:57

Blood out of a stone

"You ain't doin' it right if that's the case"

You seem to be very reticent to come up with anything constructive.

How do you obtain the information to submit P11Ds?

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By BKD
31st May 2012 20:24

Imformation

petersaxton wrote:

How do you obtain the information to submit P11Ds?

Easy - I ask the client for it. Sometimes it arrives by email, sometimes by fax, sometimes by post. That is how I obtain it.

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31st May 2012 20:27

What words do you use?

Now I think you are being childish.

What is the exact request?

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31st May 2012 20:31

I think I understand now

You are on the back foot.

If you really didn't understand my question shall I prompt you because I don't think you want to admit that you are wrong.

Do you say:

(a) Please give me the P11D forms with the numbers entered,

(b) Please let me know the details of all payments in the year ended 5 April, or

(c) Something else.

If it is (c), please explain in such away that it is helpful to the discussion.

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By BKD
31st May 2012 21:04

Back foot?

Not at all

The answer is of course (c) - something else. I'm not going to divulge here exactly what I say to clients, but it's broadly a request for details of items not covered by the dispensation (the client is reminded each year as to what is covered by the dispensation).

I know what's coming next, but I'll let you ask anyway .....

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31st May 2012 21:27

Scarey

BKD wrote:

Not at all

The answer is of course (c) - something else. I'm not going to divulge here exactly what I say to clients, but it's broadly a request for details of items not covered by the dispensation (the client is reminded each year as to what is covered by the dispensation).

I know what's coming next, but I'll let you ask anyway .....

I wouldn't be comfortable with making a similar request to my clients. You are relying on your clients having a level of knowledge that, in my opinion, the vast majority of clients do not possess. You seem to be passing the buck.

I dread to think how you get the information to prepare statutory accounts: "What's the turnover?", "What's the bank interest payable?", "What's the depreciation?"

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By BKD
31st May 2012 22:01

Simples

petersaxton wrote:

I wouldn't be comfortable with making a similar request to my clients. You are relying on your clients having a level of knowledge that, in my opinion, the vast majority of clients do not possess. You seem to be passing the buck.

In your opinion - or your experience?

Actually, I'm quite comfortable with the level of knowledge that my clients have. Whether that's because I've educated them sufficiently well, or they're just generally of a higher quality I don't know. But you're dead right - I'm passing the buck. I'd much rather not be doing P11Ds, even with a dispensation they're a time-consuming pain in the backside. Our clients are left in no doubt that all responsibility for providing us with all relevant information, and checking the accuracy of the forms, rests with them.

 

petersaxton wrote:

I dread to think how you get the information to prepare statutory accounts: "What's the turnover?", "What's the bank interest payable?", "What's the depreciation?"

That's easy to answer as well - I don't prepare statutory accounts. But it's a rather odd comparison - to liken the preparation of accounts with a form-filling exercise.

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31st May 2012 23:26

There's opinions and opinions

 

“In your opinion - or your experience?”

My opinion is a factor of my experience and knowledge.

I’ve known one of the largest companies in the UK not know who their shareholders are. The numbers were not material but they were in the millions.

“Actually, I'm quite comfortable with the level of knowledge that my clients have. Whether that's because I've educated them sufficiently well, or they're just generally of a higher quality I don't know.”

Are you saying that a client, who’s not an accountant, who will do one or two P11Ds a year is sufficiently knowledgeable? An accountant may do hundreds of P11Ds a year for many years. Who’s more likely to do a good job? If you think you have educated your clients sufficiently well, how would you describe to a client what needs to be included as expenses on a P11D (assuming there was no dispensation)?

I have a client who’s an ACA who prefers me to do his accounts because he doesn’t have sufficient knowledge. If he doesn’t have sufficient knowledge I doubt many non-accountant clients have sufficient knowledge.

There is very little rigour in education nowadays. Most people try to blunder through life and waffle away but it's easy to spot how inadequate they are. Did you see the typo in 1.17 of the 480? Doesn't anybody in HMRC proofread nowadays?

“But you're dead right - I'm passing the buck. I'd much rather not be doing P11Ds, even with a dispensation they're a time-consuming pain in the backside. Our clients are left in no doubt that all responsibility for providing us with all relevant information, and checking the accuracy of the forms, rests with them.”

Why do you get involved? You seem to be treating it as a form filling exercise rather than something that requires a lot of knowledge. You would be able to spot if your clients include a transaction that should not be included but how do you spot a transaction that they haven’t included but should have done? Maybe you don't care?

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By BKD
01st Jun 2012 07:58

By your analysis

If you want to ensure that your clients' P11Ds are 100% complete and accurate you will need to carry out a full Employer Compliance Review of all their records every year. If you have the time and inclination to do that, all well and good. I prefer to simply tell my clients what information I need for the returns. As I say, I've either explained myself sufficiently well, or my clients are sufficiently intelligent to understand the instruction. Your practice and/or clients may differ, and therefore require a different approach.

I have seen many ECRs over the years, with quite a few adjustments but only once can I recall having seen an adjustment in respect of P11Ds where we have prepared the forms.

This discussion has pretty much come to an end - we'll simply need to agree to disagree on our respective approaches to form-filling exercises.

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01st Jun 2012 08:23

Not sufficient care

BKD wrote:

If you want to ensure that your clients' P11Ds are 100% complete and accurate you will need to carry out a full Employer Compliance Review of all their records every year. If you have the time and inclination to do that, all well and good. I prefer to simply tell my clients what information I need for the returns. As I say, I've either explained myself sufficiently well, or my clients are sufficiently intelligent to understand the instruction. Your practice and/or clients may differ, and therefore require a different approach.

I have seen many ECRs over the years, with quite a few adjustments but only once can I recall having seen an adjustment in respect of P11Ds where we have prepared the forms.

This discussion has pretty much come to an end - we'll simply need to agree to disagree on our respective approaches to form-filling exercises.

Although HMRC carry out Employer Compliance Reviews the work they do is no different to the work I do but in a less formal setting. In the vast majority of cases I need details of all client transactions to prepare the accounts and I use that information to prepare P11Ds.

Your statement that you "have either explained myself sufficiently well, or my clients are sufficiently intelligent to understand the instruction" doesn't stand up to my experience in accounting. I accept that not all my clients are accountants but I trained with Ernst & Young and I worked on audits or was the senior in charge of audits for some of the biggest companies in the country.

I didn't get involved in P11Ds when with Ernst & Young but with any clients I would want to satisfy myself that whatever I was involved in was accurate. Simply saying that I explained the rules to them and they were intelligent only demonstrates a lack of sufficient care.

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01st Jun 2012 08:01

Further to our discussions

I've sent an email to the OTS recommending that that HMRC only require P11Ds to be submitted in the case of an employee/director receiving taxable benefits or round sum expenses greater than the HMRC allowances.

This would do away with dispensations and the preparation and submission of the majority of P11Ds.

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By BKD
01st Jun 2012 08:18

That makes no sense at all

petersaxton wrote:

I've sent an email to the OTS recommending that that HMRC only require P11Ds to be submitted in the case of an employee/director receiving taxable benefits or round sum expenses greater than the HMRC allowances.

At the moment, the only things you need to report on P11Ds are taxable benefits and round sum expenses in excess of HMRC allowances. So what do you expect your email to achieve?

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01st Jun 2012 08:33

Isn't it obvious?

BKD wrote:

petersaxton wrote:

I've sent an email to the OTS recommending that that HMRC only require P11Ds to be submitted in the case of an employee/director receiving taxable benefits or round sum expenses greater than the HMRC allowances.

At the moment, the only things you need to report on P11Ds are taxable benefits and round sum expenses in excess of HMRC allowances. So what do you expect your email to achieve?

At the moment if a company doesn't pay wages and doesn't provide taxable benefits and round sum expenses in excess of HMRC allowances but does reimburse expenses they would have to set up a payroll scheme and either apply for a dispensation or prepare, submit and distribute P11Ds. If P11Ds were only required along the lines that I set out then many companies would not need to set up a payroll scheme, they would not need to apply for a dispensation and they would not need to prepare, distribute and submit P11Ds. I think that would be an achievement but I do realise you may not share my view.

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By BKD
01st Jun 2012 09:05

And how ...

... do you propose ensuring that your client has done nothing more than reimburse expenses etc, thereby avoiding the need to file P11Ds? The checks required would be little different to those required to ensure that a dispensation is complied with.

Yes, accounts info can be a useful source of infomation for P11Ds, as can info obtained when preparing CT600s. But we're clearly working with different client bases. Our firm certainly doesn't need details of evey transaction in order to prepare a set of accounts. Even if we did, unless every one (or the vast majority) of your employer clients has a 5 April year end, and you're able have the accounts finalised by 5 July, you will not be able to use the accounting records to complete the P11Ds.

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01st Jun 2012 10:14

Client base

"... do you propose ensuring that your client has done nothing more than reimburse expenses etc, thereby avoiding the need to file P11Ds? The checks required would be little different to those required to ensure that a dispensation is complied with."

It depends on what the dispensation says. Some dispensations don't cover entertaining by directors.

I tell them what they can and cannot do but I can't be certain what my clients have done without seeing the records. That's exactly why I ask for the transactions. I do have  

"But we're clearly working with different client bases. Our firm certainly doesn't need details of evey transaction in order to prepare a set of accounts."

I have 10 clients that have turnover of around £100k, 7 clients with turnover between £150k - £500k and one client with turnover of around £4m. I have 55 company clients in total and the rest of my 193 clients consists of one LLP, a few partnerships, a few personal tax clients and the rest are sole traders.

The majority of my clients use Excel for their accounting data but some use QuickBooks, Sage, Exchequer or Iris Openbooks. A few can't even use Excel so they give me the paperwork.

The big client has written a report to extract the P11D information and I have compared that to the underlying data and it works well. I also have confidence in this clients work.

"unless every one (or the vast majority) of your employer clients has a 5 April year end, and you're able have the accounts finalised by 5 July, you will not be able to use the accounting records to complete the P11Ds."

The vast majority of my clients have a year end of 31 March so I ask them to also provide the data for 1 - 5 April. If a client has a different year end I ask for the data from the last set of accounts to 5 April.

What size firm did you train with?

How come you don't prepare statutory accounts? Do the clients use their own accountants? Are you working in a specialised department? What is your client base?

 

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By BKD
01st Jun 2012 13:30

.

petersaxton wrote:

The vast majority of my clients have a year end of 31 March

As i suspected, our client bases are quite different

petersaxton wrote:

What size firm did you train with?

Irrelevant

petersaxton wrote:

How come you don't prepare statutory accounts?

Because all I handle is tax - there are others in the firm that have the dubious pleasure of preparing accounts.

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01st Jun 2012 14:19

Says it all

BKD wrote:

petersaxton wrote:

What size firm did you train with?

Irrelevant

Your non-answer gives me all the information I need to confirm my suspicions.

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@ Peter

What do you think the relevance is?

 

For what its worth, I find myself agreeing with both BKD and yourself!

I have made assumptions in the past based on my knowledge of the client and their books, speed, simplicity, risk etc.

This year I decided to be far more collaborative because I felt it was right for the client to be more directly involved in the process and also to cover my backside. It seems it was a bad decision because I am getting too much feedback along the lines of, 'why have you made it more complicated this year, have you been doing it wrong all this time, are you trying to get more money out of me for something I don't need, etc'

I guess, the answer is to have a system based on your own practice culture, attitude to risk and the balance between compliance and the cost of it. And then stick to it.

Certainly, clients seem to be suspicious of change.

.

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01st Jun 2012 16:43

Relevance

I trained with a large firm but I have worked with small firms. At the international firm you had to be able to justify everything you did. With small firms the attitude seemed to be more about charging as much as possible for doing as little work as possible. Obviously not all small firms are rogues and there have been scandals at large firms but in my experience at the large firm the culture was to do everything properly.

I remember doing an audit at a small firm. The client was a reasonably large shop. I collected the paperwork. Amongst the paperwork was a petty cash book with expenses of about £1,000 per week - this was 30 years ago. I couldn't see any supporting documents and many of the entries looked very suspicious. I phoned the owner and asked him for the documents supporting the entries in the petty cash book. The owner asked me why I wanted to see them. I told him it was so I could check the entries in the petty cash book to supporting documentation. He said nobody had ever done that before. I said I am doing the audit this year and checking the petty cash book is part of the audit programme.

This particular firm seemed to have a large pool of incompetent audit clerks. When I needed one to do calling over I obviously chose badly. "864" - "no", "864" - "no, it's 648", "that's what I said". This wasn't an isolated instance. They seemed to be totally lacking in any ability with numbers. I ended up checking the accounts myself.

I've seen plenty of accountants write a letter with queries on and expect the clients to provide answers even though it's obvious the clients don't know what time of day it is. As long as the accountant has not seen any evidence of the information being wrong they accept it. They keep their eyes firmly shut at every stage of the process. The funny thing is that these are accountants who pretend they have an intelligent client base when in fact they don't care what is churned out. They usually get defensive if you ask a straight forward question and avoid giving an answer.

If I think that I should do something better I go ahead and do it and answer the questions when they arise. In the case you put forward I would say that I felt a different approach was needed to see if improvements could be made and tell them not to be so cynical!

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By BKD
01st Jun 2012 21:56

Accusations

petersaxton wrote:

I've seen plenty of accountants write a letter with queries on and expect the clients to provide answers even though it's obvious the clients don't know what time of day it is. As long as the accountant has not seen any evidence of the information being wrong they accept it. They keep their eyes firmly shut at every stage of the process.  The funny thing is that these are accountants who pretend they have an intelligent client base when in fact they don't care what is churned out.

If those comments are directed at me and my firm, I suggest that you retract them pretty swiftly. If they're not, then I would simply suggest that you avoid making sweeping generalisations.

 

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01st Jun 2012 22:20

Relevance?

What's the relevance to P11Ds?

 

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02nd Jun 2012 09:05

Never Mind Directors

The whole idea of spending hours calculating reimbursable expenses for any employee, putting them on a P11D (where no dispensation is in place) and the employee reclaiming the self same amount either on their tax return or by a phone call to HMRC is ridiculous.

Dispensations are admittedly easier to get these days but there was a time when one man band companies couldn't get them because of HMRC paranoia about a lack of oversight.

As far as the law is concerned I'm pretty sure that, if expenses are paid, a scheme must be set up in order that P11Ds can be submitted.

I do know that some taxpayers (invariably unrepresented) end up with their code number reflecting these genuine expenses and never get around to reclaiming the expenses - I suspect this is why HMRC are keen to keep the status quo.

I don't know whether the OTS have visited this subject but this might redeem themselves in my eyes after their pathetic efforts with IR35.

 

 

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By BKD
02nd Jun 2012 10:00

You've answered your own point

thomas34 wrote:

The whole idea of spending hours calculating reimbursable expenses for any employee, putting them on a P11D (where no dispensation is in place) and the employee reclaiming the self same amount either on their tax return or by a phone call to HMRC is ridiculous.

Put a dispensation in place. As you say, it's a straightforward exercise.

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02nd Jun 2012 10:29

90% of the work still needed

BKD wrote:

thomas34 wrote:

The whole idea of spending hours calculating reimbursable expenses for any employee, putting them on a P11D (where no dispensation is in place) and the employee reclaiming the self same amount either on their tax return or by a phone call to HMRC is ridiculous.

Put a dispensation in place. As you say, it's a straightforward exercise.

You'll still have to do 90% of the work anyway in case there are expenses not covered by the dispensation - unless you rely on your client doing the work!

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By BKD
02nd Jun 2012 10:42

Procedures

petersaxton wrote:

You'll still have to do 90% of the work anyway in case there are expenses not covered by the dispensation - unless you rely on your client doing the work!

Yes I am relying on the client to provide me with details of expenses not covered by dispensation. Just because you are unable to trust your clients with such a simple exercise doesn't mean that the rest of us don't trust our clients. Once the client knows which expenses are covered by the dispensation, it's a relatively straightforward exercise to keep track of them (and, conversely, those expenses not covered). Each to their own - you do things your way, others will do things theirs. I have so far resisted from commenting on your practices, but since you have refused to retract your insinuations above - one look at your website confirms every suspicion I have about you.

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02nd Jun 2012 10:26

Sledgehammer to break a nut

 

"The whole idea of spending hours calculating reimbursable expenses for any employee, putting them on a P11D (where no dispensation is in place) and the employee reclaiming the self same amount either on their tax return or by a phone call to HMRC is ridiculous."

Agreed.

"Dispensations are admittedly easier to get these days but there was a time when one man band companies couldn't get them because of HMRC paranoia about a lack of oversight."

Although dispensations may mean that in some cases you don't have to submit a P11D you still have to go through the records - or ask clients to - before you are sure that the dispensation covers all the payments actually made.

"As far as the law is concerned I'm pretty sure that, if expenses are paid, a scheme must be set up in order that P11Ds can be submitted."

Yes, I checked that with HMRC. I have to admit that, in the past, if there wasn't a payroll scheme in place I wouldn't even check if there were any expenses. In theory, you have a number of choices but, given the timings involved, except for a few company clients all the others, whether paying wages or not, you should set up a payroll scheme, apply for a dispensation (which doesn't cover everything), go through the accounts, see whether any P11Ds are needed, prepare, submit and distribute any P11Ds or state they are not needed on the P35 or phone HMRC.

"I do know that some taxpayers (invariably unrepresented) end up with their code number reflecting these genuine expenses and never get around to reclaiming the expenses - I suspect this is why HMRC are keen to keep the status quo."

If the taxpayer is under self assessment they would get the tax refunded later. If they are a PAYE taxpayer then you are right. Maybe HMRC should mention what may be needed on the code notices.

"I don't know whether the OTS have visited this subject but this might redeem themselves in my eyes after their pathetic efforts with IR35."

My email may spur the OTS into action! - or maybe not.

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02nd Jun 2012 10:50

Simple exercise?

"Just because you are unable to trust your clients with such a simple exercise doesn't mean that the rest of us don't trust our clients."

You think that working out what needs to go on a P11D is simple? I would suggest that means you don't know what needs to go on a P11D. If you do know and if it's so simple to tell clients, can you say here what expenses need to be included on a P11D if there is not a dispensation?

"one look at your website confirms every suspicion I have about you."

That's rich coming from somebody who is not willing to reveal his experience!

Are you a partner or an employee?

 

 

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By BKD
02nd Jun 2012 10:58

Missed the point

petersaxton wrote:

 If you do know and if it's so simple to tell clients, can you say here what expenses need to be included on a P11D if there is not a dispensation?

No - because it depends on each client's circumstances. What's relevant are the expenses that are covered by the particular dispensation. Once the client knows what is covered, he can keep track of them and exclude them when reporting. You really are making it seem much more complicated than it is.

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02nd Jun 2012 11:15

Stark contrast

BKD wrote:

petersaxton wrote:

 If you do know and if it's so simple to tell clients, can you say here what expenses need to be included on a P11D if there is not a dispensation?

No - because it depends on each client's circumstances. What's relevant are the expenses that are covered by the particular dispensation. Once the client knows what is covered, he can keep track of them and exclude them when reporting. You really are making it seem much more complicated than it is.

Do your clients know what to report regarding expenses that are not covered by dispensations? Do you know what they are? What are they? Do you know what expenses do not need to be reported even if there isn't a dispensation? I don't need examples just general principles.

It would appear that you don't know so you are avoiding answering the question.

You avoided answering my question when I asked about your experience.

I notice you are not willing to even answer my question about whether you are an employee or a partner.

Your reticence to answer simple questions is very telling.

I assure you I am not trying to humiliate you. I am simply casting doubt on yours, or anybody elses, ability to "educate" their clients - even "intelligent" clients - sufficiently well for them to provide you with details of expenses to be included on a P11D.

Your overeagerness to tell the world how superior you and your clients are is in stark contrast to your "undereagerness" to justify your statements by answering a few simple questions.

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By BKD
02nd Jun 2012 11:36

Casting doubts

Which is exactly why I refuse to answer your petty insinuations.

But in answer to one of your points:

Yes, my clients are told which expenses that are not covered by a dispensation are reportable.

You can take my refusal to argue your other quesitons as a lack of knowledge if you wish - don't make the mistake of confusing me with someone that gives a s.....

As for your questions about my own capability - well, they'll also go unanswered because you've obviously made up your own mind. Your comments I find quite insulting but at the sme time - based on the quality of your website - laughable.

I don't believe that my clients are in any way superior. But you stated above that the majority of your clients use Excel. Nothing wrong with that, but it demonstrates that your client base and mine are quite different.

If you feel that you need to examine every one of your clients' transactions to ensure that P11Ds are correctly completed, then that is your choice. As Andy said above, it's all about risk analysis. With that in mind, and the instructions given to my clients, I'm quite happy that my clients' P11ds bear scrutiny (as evidenced by my above comment regarding the outcome of numerous ECRs).

Just so you know, and much as you hate folk that say this, this is my last contribution to a thread that is turning into the usual weekend slanging match. You're welcome to have the last word. (Though if it's an insult, it will be reported)

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02nd Jun 2012 12:27

Never give an answer that might embarrass you

"Yes, my clients are told which expenses that are not covered by a dispensation are reportable."

I didn't ask you if you told them. I asked you if you could explain what you tell them in this thread. You are not willing to do so. Combined with your other comments I am convinced it is because they would not stand up to scrutiny.

"You can take my refusal to argue your other quesitons as a lack of knowledge if you wish"

I don't take your refusal to answer - not argue - my questions as a lack of knowledge. I think you do know whether you are a partner or an employee. Even I know!

"your client base and mine are quite different."

You have a client base? Does your boss know that?

I'm sure that your sudden refusal to answer questions about P11Ds after being so effusive earlier can be explained easily.

In the USA they call it "pleading the 5th".

"As Andy said above, it's all about risk analysis. With that in mind, and the instructions given to my clients, I'm quite happy that my clients' P11ds bear scrutiny (as evidenced by my above comment regarding the outcome of numerous ECRs)."

ECRs are about risk analysis, too. They don't care what expenses go on P11Ds if there isn't any loss of tax. Don't take it as a stamp of approval.

"if it's an insult, it will be reported"

I'm sure you would - and if it's a question about P11Ds, it won't be answered. It says it all really.

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02nd Jun 2012 12:54

Websites

My website was set up in 1998 when I got my webspace. I knocked it up quickly and meant to change it later but my client base has expanded and kept me too busy to put my ideas into practice. I hope to be able to update it in a few months. I could have a section that explains how to complete P11Ds. At least there would be one person who would benefit from it!

I have set up another website in the last few days: www.beigeisbeige.co.uk

Do you have a website?

No, don't answer that, either! :-)

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