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After a sleepless night and endless questioning in my head, I would be grateful if people could point me in the right direction here. I am a sole practitioner who has just taken on a number of clients, all of which have at least one non-resident director / employee who perform duties outside of the UK who have at sometime had business travel expenses paid for by the company. From a UK tax perspective I am in a conundrum regarding whether to complete a P11D or not. None of these companies are PAYE registered as they don't have any UK payroll, the directors / employees in question do not have an NI number and I am happy that any travel expenditure has been for business purposes and that there will be no UK tax / NI consequences (on the basis that expenditure is for business purposes and the fact that the directors / employees in question are not resident in the UK). The prospect of registering for payroll, getting NI numbers etc just seems to be completely over the top given that in practise some people just wouldn't bother with a P11D in this instance. But I don't want to run the risk of clients getting fines later down the road. My head tells me the right thing to do is to submit a P11D, however is there an easy way to do this without a PAYE reference and an NI number - I have seen people saying that the CT reference number can be used but does this work in practise? And what should I use for the NI number? Or should I just not bother? Any advice greatly appreciated. 

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By charlb
18th Apr 2012 14:06

Chilly

Someone please break the ice.......

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By Locutus
18th Apr 2012 14:30

I wouldn't lose too much sleep over it

The last time I had a PAYE investigation (which are thankfully rare these days) for years the client had been reimbursing business expenses to employees without a dispensation and not recording them on the P11D.  This failure just warranted a "you should consider applying for a P11D dispensation" paragraph in the letter.  There were no penalties.  There are usually far more important (tax collecting) issues for the Inspector to deal with.

If you do want to report the expenses then you need to do it properly by opening a PAYE scheme, getting NI numbers and preferably getting a dispensation rather than reporting annually on the P11D.

Why not just ask the client whether they want to pay £X to avoid the theoretical risk getting penalised for not reporting the non-taxable expenses?

If they refuse then I wouldn't lose too much sleep over it.  There are probably far more important tax risks to put right first.

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18th Apr 2012 15:06

overseas employment

I really don't see any problem here.  Presumably there is a local payroll being run in the countries where these directors are employed and if a local P11D equivalent is required under local laws it is being prepared.  Why would there be any UK payroll requirements for an employee in an overseas country?

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