No 2014/2015 P11D(b) submitted – can penalty for late Return be avoided?

No 2014/2015 P11D(b) submitted – can penalty...

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In previous years a company has had no P11D benefits to report.

However, I am currently preparing the accounts for the year ended 31 March 2015 and have found that the sole director received from the company a loan of £80,000 on 02/07/2014.  If this loan is regarded as interest-free (there is nothing to suggest otherwise), the benefit of approximately £2,200 should have been reported on a P11D(b) by 06/07/2015 and, if this form is now submitted, penalties of £100 per month will be imposed for 5 months.

There will also be a small interest charge on the Class 1A NIC of £303 which should have been paid by 19/07/2015.

Is there any likelihood of no penalties being imposed, if I write to HMRC, reporting the benefit, enclosing payment of the Class 1A NIC and explaining that this was the first year of any such benefit and that it was overlooked in error?

Alternatively, could the director treat the loan as incurring interest at the official rate of 3.25%, thereby ensuring that there was no beneficial loan interest benefit?  As it happens, aside from the loan of £80,000, he has a credit balance of £2,500 on his director’s loan account, which would be sufficient to meet the interest payable to the company for 2014/2015.  The accounting entries would presumably be as follows:

Dr DLA                                  £2,200

Cr Interest receivable                    £2,200

Is this route possible and, if so, are there any other considerations to take into account?

Many thanks for any assistance and guidance. 

  

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