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
Replies (8)
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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.
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.
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."
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)