Mobile phone in directors name

Mobile phone in directors name

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Hi all,

A client of ours confirmed that they have a mobile phone of which the majority of he cost was in relation to business use. The bill is in their name.

I understand that the business element should have gone on to a P11D with a corresponding expense claim, however the P11D has obviously passed.

We are only talking a few hundred pounds and the tax is neutral. The accounts for 30th April are now being finalised and we want to credit the directors account with the business element.

Shall we just set up a dispensation now (if this is possible?) or to claim do we need to submit nil p11d's.

Thanks,

Replies (18)

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By johngroganjga
21st Aug 2015 20:35

It would only go on a P11D if the company paid it, but from what you say the director paid it himself.

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By j f
22nd Aug 2015 08:07

Yes but we want to credit his directors account with the business element in the year end accounts.

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By johngroganjga
22nd Aug 2015 08:14

That's fine. Nothing to stop you ding so. Obviously client should be able to justify the apportionment if challenged.

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By pedre
23rd Aug 2015 12:42

.

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By Matrix
23rd Aug 2015 08:16

Yes it should have gone on a P11D but there are members who believe that, since the reimbursed expenses rules will be changing, that this is not currently necessary.

Your client can only claim the business element if it is clearly identifiable.  If there is a monthly fixed call package then nothing can be claimed.  The contract should be changed into the company's name in which case the whole bill can be claimed with no BIK implications.

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By johngroganjga
24th Aug 2015 08:49

Gone on a P11D?

Surely not until the year in which the reimbursement is claimed - which is 2015/2016.

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By Matrix
24th Aug 2015 09:03

The OP said "I understand

The OP said "I understand that the business element should have gone on to a P11D with a corresponding expense claim, however the P11D has obviously passed." so I had assumed some of the claim related to 2014/15.

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Replying to jcace:
By johngroganjga
24th Aug 2015 09:37

P11D

Matrix wrote:

The OP said "I understand that the business element should have gone on to a P11D with a corresponding expense claim, however the P11D has obviously passed." so I had assumed some of the claim related to 2014/15.

Yes we are indeed told that some of the claim relates to 2014/2015, but we are also clearly told that no claim was made or recognised until 2015/2016. Is it not the year of reimbursement that determines which P11D it goes on?

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By JCresswellTax
24th Aug 2015 09:27

As the matrix says, be careful

You can identify the business calls and claim them.  You can't, however, split the tariff charge between business and personal use.

SOLUTION - tell him to get a company registered mobile phone then he can claim 100% of the costs, no matter the split between business and personal use.

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By JimH
24th Aug 2015 10:29

PAYE
Not sure it is a P11D matter. If the company is settling the pecuniary liability of an employee, with phone contract in employee name, I think it a PAYE payroll matter rather than P11D.

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By johngroganjga
24th Aug 2015 10:37

It isn't settling his pecuniary liability. The question makes no sense unless the director has already paid the bills himself (there would be nothing for him to be reimbursed for otherwise).

The question is about the company reimbursing the director for the cost of business calls he has incurred personally.

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By j f
24th Aug 2015 10:48

Thanks for the feedback. Once

Thanks for the feedback. Once we realised the phone bill was in his name we told him to transfer it to the company. Done. My question relates to what we do with the expenditure paid personally for a personal mobile phone contract which included business use. I did not want to mess around drafting a P11D with a corresponding expense if it would trigger late filing penalties. I wanted someone to either slap me with a fish and say it's immaterial and tax neutral so don't fret or say actually you do need to do the paperwork if you are going to claim it. For timeline clarity, year end is April 2015, expenditure pre-dates this.

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By johngroganjga
24th Aug 2015 11:04

Yes but from what you say his expenditure pre-dates 30 April 2015 but the company's (i.e. its reimbursement to him) does not - indeed as of 24 August 2015 it has not yet occurred?

So I would just make the entry and worry about the P11D treatment, if any, in May / June 2016. 

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By j f
24th Aug 2015 13:05

But if we credit this expenditure to his directors account in the April 2015 year end, would that not constitute reimbursement?

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Replying to A Chalk:
By johngroganjga
24th Aug 2015 13:29

2015/2016

j f wrote:

But if we credit this expenditure to his directors account in the April 2015 year end, would that not constitute reimbursement?

Yes but it would be reimbursement in 2015/2016 wouldn't it?

There is more than one way to skin the cat, but whichever way you do it it's a 2015/2016 P11D matter, if it's a P11D matter at all. 

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By Steve Kesby
24th Aug 2015 13:13

Not...

... if some time after 5 April 2015, but before 1 May 2015, the director and the company had actually agreed that the expenditure should be reimbursed in that manner, and an adjustment to the loan account was then made contemporaneously.

In that situation, it would fall within 2015/16 and be reportable on next year's P11D as John says. If there's a corresponding expense claim you might choose simply not to report it, and I doubt that there would be any comeback from HMRC.

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By johngroganjga
24th Aug 2015 13:23

Or do it another way. Director submits his claim now, and is reimbursed today (by cash or credit to DLA as he and the company decide). Company then accrues the expense in its 2015 accounts.

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By j f
24th Aug 2015 13:46

Great, thanks both

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