Expenses PAYE coded as benefits

Expenses PAYE coded as benefits

Didn't find your answer?

We regularly encounter employees being issued with PAYE coding notices charging to tax as a benefit in kind entries that have been made in the online P11D (HMRC software) within the following heading:
> Expenses payments made to, or on behalf of, the employee (e.g. travelling, entertainment)
>> Other expenses

The P11D does not create a class 1A NIC charge for such entries, and I understood that this corresponded to the final row in section N of the paper form P11D.

Where we act for the employee, and the employee self assesses, then a corresponding section 336 claim is included in the SA return. For other cases we generally prepare a standalone section 336 claim for the employee, but I have to admit that these sometimes slip through the net.

But what bugs me is the inconsistency. The coding notices are usually issued before the SA return is filed containing the claim to relief. But other categories of reimbursed expenses are not coded out, and in some cases no action is taken to restrict the code despite the absence (for the time being) of a section 336 claim (whether standalone or within the SATR).

I phoned HMRC on a couple of particular cases who advised that if the amount was not chargeable to Income Tax then we have entered it in the wrong box on the P11D. Eh? What's that all about?

Clint Westwood

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.