Received a bulletin from those nice TIPS & ADVICE people, about Benchmark Subsistence Payments/Allowances, where:
£5 can be paid if starting out before 6am
+£5 if out for 5hrs or more
or £10 if out for 10hrs or more
or £15 if also out beyond 8pm
Sounds great if business takes you out for long hours of the day.
(For an employee out from 5:45am until say 8:30pm, that's £20 for that day. I know some one-man bands that are out 5days/week like that.. phew! A lot of tax-free, NIC free and paperwk-free cash eased out of the company -- better than a dividend.)
I have applied it to the last three months of my director expenses, but the QUESTION is: How far back could I go in applying this? Could I review the last three years or, in the extreme, all the way back to (when it was made free of P11D paperwork etc), 6 years ago?
How far back is okay to claim these previously unclaimed Benchmark Subsistence Payments/Allowances?
Replies (5)
Please login or register to join the discussion.
I think you may need to read that again!
From memory admittedly but I don't think you get that much on a regular basis. For example I think the pre 6.00 am allowance is only if this is an unusually early start. It's not allowable of you start that early every day.
You should also apply to HMRC for clearance to use the benchmark rates. They sometimes refuse this to one man band companies unless you can show someone verifies your claims.
Have a look here
Have a look at EIM05200 which says:
With effect from 6 April 2009, employers can opt to use the advisory benchmark scale rates for subsistence expenses that have been set by HMRC (see EIM05230). They can do so by ticking the appropriate box on form P11Dx or by making a request in writing.
Given that I'd suggest claiming benckmark rates prior to doing so was asking for trouble I its ever spotted!
Dispensation
You need to apply for a dispensation. A dispensation is not normally backdated.
This is not a tax free allowance. The employee must incur an expense and the employer must reimburse it. It is the reimbursement that is free of tax.
What you are proposing borders on fraud,