If a company is paying a directors mobile phone bill (the phone is used for business and private use) I know I have to add the value of the benefit to the directors other earnings for class 1 NIC purposes but when?
Should it be done monthly when the mobile bill is paid, or as soon as the total cost is known once the P11D is completed and entered on the next payroll run?
Replies (7)
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Niether
Class 1 NHI is assessed separately. Once you, or your agent, has posted the P11Ds on line you will/should get a letter of assessment with the total due and where to pay it. The reference is your PAYE Ref. with an extra 4 digits on the end. I can't see my bank payments at the moment but it will be on the form. When you pay it you just code it to 'ERS NHI' in the P&L. If the amounts are substantial (not in your scenario) they should be accrued if doing monthly or quarterly management accounts.
Maybe not....
If the mobile 'phone is the employee's and the company is paying the bill, then the amount has to be added to earnings for Class 1 purposes as the OP said.
http://www.hmrc.gov.uk/payerti/exb/a-z/t/telephones-mobile.htm#3
I would do it monthly and then the amount for the P11d will be obtainable from your payroll software at the end of the tax year.
If A Director
If a Director, can you leave it off the payroll, and add the BIK amount from the Plld to the Directors Self Assessment in January and they pay the tax on it then?
Carolynne
It' s liable to Class 1 NI Carolynne, not 1A. It is taxable via P11D, only the NI is catered for via the payroll.
Ahh
Of Course, I wasn't thinking abut the NI, my brain hadn't registered the whole question sorry.