P11D and Debit cards

P11D and Debit cards

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I am guessing there is no distinction for p11d reporting between the company having credit cards or debit cards

situation is currently client has 2 debit cards - one for director and for for office manager[not shareholder or director] in fact just a young person in first job straight out of school

should she have a p11d for tens of thousands of pounds where her card has been used to book for example : international business flights and sundry travel for staff, pay suppliers/purchase ledger, and company bills etc

my assessment is that without a dispensation for her... this is reportable
the other card belongs to a director and therefore whatever the value on it, it is reportable

are these views correct

thx
AR

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By AnonymousUser
03rd Jun 2009 08:56

Will this pointless exercise ever be sorted out?
Expenditure from which an employee benefits personally -- P11D

Expenditure wholly and exclusively for business -- not P11D

How the money was expended -- Irrelevant


Pretty sure thats how 98% of businesses do it anyway.

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By User deleted
02nd Jun 2009 17:40

Faukes - Engineers P11D
Fauke says that the Director would have been horrified if his P11D included the flights for the Engineers (employees) and rightly so. Dont miss the fact that the Engineers P11D will however include the flight cost with an appropriate S336 claim. Just because it was the Directors CO Credit card doesnt get around the "on behalf of" test. It is not only reimbursements that go on P11Ds. From memory it is expenses paid to or on behalf of which need to be considered.

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By frauke
29th May 2009 16:03

Debit cards
I have a collection of debit cards (HSBC now issue company credit cards which have the same facilities) in my name for various companies and other organisations. They are in my name - simply because I am responsible for the card. Banks will not issue them only in the companies name. The card is compulsory as without it - the various organisations would not be able to pay cheques into the bank accounts via machines, or have access to internet banking.

For convenience and simply because it is easier than writing a cheque, I may choose to use them to pay the company bills. These can never be considered re-imbursed expenses!

Company credit card for own use - yes. Personal Credit card expenses reclaimed from Company - yes

But debit/credit card 100% business use - especially if there are restrictions and control on the usage - the same restrictions and controls of the Cheque book - then no P11d!

I used to work for a company where the Service Dept, used the company directors company credit card to make all the bookings for the Engineers or Contractors flights, accommodation etc etc. He would be horrified if we had reported it on a P11d! He had no control over what we used it for. We didn't have the time, when a customer was in Breakdown halfway across the world, to ask his permission. We had to get an Engineer there immediately, and these items had to be paid for immediately. Cheques were not an option! Finance preferred it done this way too - it made it easier for us to work out how much to charge onto customers without the need of waiting for the Service Engineer to remember to put his expense/find receipts etc claim in. No delays in invoicing customers!

You need to be sensible about this. The rules are there to stop a member of staff or director from using the company money without any particular business reason at the time of the spend and then either charging the company for it or deciding later it should be a business expense. When credit cards were first introduced this was very likely as they weren't the normal way of paying company bills. Now they are often equivalent to the company cheque book. In these cases I don't see why it should not be treated the same. Obviously, if the usage is not the same as it would be with the company cheque book paying an invoice to the company etc.... then report it.

Ask yourself - would you have reported the expenditure if the company had paid it by cheque - if yes, then report it - if you would not have, then don't.

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By petersaxton
28th May 2009 18:27

More information
I should have said the HMRC explanation is not very comprehensive.

I have asked HMRC about what to do in the case of employees making many payments for the company - such as buying computers or milk for the business and then claiming them on expenses. I had been told to include them on the P11D.

The following indicates that is not correct:

http://www.hmrc.gov.uk/employers/ebik/ebik2/office-01.htm

and

480(2009) Expenses and benefits Page 11

"Purchases on employer’s behalf
Businesses are often run in such a way that employees make payments on their employer’s behalf. For example, an employee may buy stamps, stationary and items of equipment for the employer and be reimbursed the costs incurred from petty cash or by cheque. Such transactions are not providing the employee with either earnings or expenses because the employee has received no money of his own. Accordingly such reimbursements do not feature on the P11D."

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By User deleted
28th May 2009 16:36

I think no entry
Based on the HMRC link and using the "on behalf of the employer - with prior permission: goods and services to be used in business " you will be fine. Only my opinion but it is the one I am adopting for a company whom pay for a lot of goods with a debit card and all items are invoiced to the company (for VAT purposes obviously)

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By AnonymousUser
28th May 2009 15:55

further to responses

thanks for the link to HMRC
like all such i still remain uncertain - the 2 sets of circumstances noted whilst' cards in the employers name' used for the employers business - have diferent treatments .
At least no tax nor NI is applicable for eithr case - but one does require entry on p11d + p9d

the on behalf of the employer use - has the no reporting - but of course the employee is booking business aproved purchases/bookings for the business! on employer use


the issue at hand has been the cards have employees names + company name
one card is in the name of a longtime ex employee and has never been cancelled + replaced

so Company debit card in name of ex employee zyx ltd - is still being used by the Finance Manager to pay for online goods - stationary etc / pay the odd purchase ledger bill / buy the office teabags at Te**o and pay for the stamps at the PO

thoughts
thx

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By User deleted
26th May 2009 09:18

Whose name...
.. is on the card?

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