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P11D - basic query

I understand that where an employee arranges entertainment and the company pays, there can be no NIC/PAYE due assuming it is business related, but that the cost should be entered in section N. But is it the payer's P11D or the entertained staff's P11D that the amounts are entered on?

E.G. A sole director pays £240 on his company barclaycard (so in effect the company pays) to take his staff (and himself) out for a business related(!) meal. Does this amount go on his P11D as a payment by him reimbursed by the company, or is it split between the various staff members (per capita) and do the individual amounts go on everyone's P11D as a "receipt of entertainment"? In other words is it the person paying the expense or the staff receiving the benefit?

What would happen if the director were entertaining clients?

I find this all very complicated.

Also, can I get a dispensation for staff entertaining or only for clients? The P11DX form seems to suggest it is only for client entertaining?

Thank you

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02nd Jul 2009 22:09

I think you are confusing benefits and expenses
If a director pays for a staff outing on his credit card, strictly, that is an entertaining expense for the director to be reported on his P11d, but is also a benefit to be reported on the P11ds of those employees attending the function.

Dispensations cannot apply to staff entertaining because it is either a taxable benefit, exempt under the £150 a year allowance for annual functions or could be covered by a PAYE Settlement Agreement.

The reporting of benefits in this situation is confused and messy.

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