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P11D (again!) - Payroll scheme closed

P11D (again!) - Payroll scheme closed

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Hi all

New client (Ltd Co),  2 directors, each 50% shareholders, husband and wife - The wife was the only one drawing a salary so the payroll was set up for just one employee. The company isn't expected to do a lot in the near future so they closed the PAYE scheme on 5th April 2014. 

The husband (who was never on the scheme) has travel and subsistence expenses and has had for the last couple of years. The ex accountant never filed a P11D nor set up a dispensation with HMRC.

There is no NIC liability but the clients and I would like to do this properly. I can't file a P11D electronically however I thought I could maybe send a paper form using the now closed PAYE reference? Or do I just write to HMRC? 

And do I disclose the items for the previous tax years (although no tax liability arises?)

Sorry if this is a trivial matter, I would appreciate your advice.

Replies (8)

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By johngroganjga
19th Jun 2014 20:17

Yes you can submit a paper form.

I would not be doing anything about the previous years.

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By Chipette
19th Jun 2014 20:46

Thank you for your answer.

 

(I wasn't expecting anyone to answer this tonight!)

 

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By Chipette
20th Jun 2014 17:32

Please correct me if I am wrong, but reading another similar thread on here has left me confused. I thought all travel and subsistence and entertainment expenses were reportable on P11D regardless of how they are paid (direct by the company or reimbursed to the employee/ director).
Can someone please confirm this?
All expenses incurred for my client were paid directly by company card so maybe I don't need a P11D after all.

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By DMGbus
20th Jun 2014 20:08

Not reportable if not taxable

The general rule (para 9.1) is that travel expenses are reportable.

However there is an exception to the general rule (para 9.3) that says not reportable if not taxable.

The above are not paragraphs of law but paragraphs from official HMRC guidance.

Some advisors disagree with the above and so they might go round in circles chasing their tails by declaring a BIK for non-taxable travel expenses and making an equivalent s336(or whatever) claim for the employees to claim tax relief.

Another strategy is to go for a dispensation, however I rather like the above quoted guidance (paragraph 9.3 is especially good) and experience through several decades of PAYE inspections have yet to see an issue raised about tax allowable travel expenses not being reported, even if no dispensation in place.

 

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Replying to Wanderer:
Euan's picture
By Euan MacLennan
21st Jun 2014 15:53

Where do you get that from?

DMGbus wrote:

The general rule (para 9.1) is that travel expenses are reportable.

However there is an exception to the general rule (para 9.3) that says not reportable if not taxable.

The above are not paragraphs of law but paragraphs from official HMRC guidance.

I am not aware of any such guidance.  However, we are moving in that direction as there is now a consultation about employers not having to report the reimbursement of business expenses incurred by employees - see page 4 of Employer Bulletin 48.  Unless and until that comes into force, expenses reimbursed are technically taxable and hence, reportable on form P11D, unless a dispensation has been granted - the only reason that they end up not being taxable is that the employee can then make a claim for necessary expenses of employment to set against the income.

 

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By Chipette
21st Jun 2014 10:57

Where is the logic?

If HMRC guidance states "not reportable if not taxable", why would they have introduced the need for dispensation?

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Locutus of Borg
By Locutus
21st Jun 2014 20:00

I've not reported non-taxable expenses for a few years now
Firstly, I respect all those whom diligently report non-taxable expenses on the P11Ds - you have more patience than me.

What you report and obtaining the necessary information to report is a nightmare. HMRC don't seem to fully understand their own rules or indeed even really care about these days, since there is no tax due.

I just couldn't be bothered with this futile waste of time in the end and gave up doing them. If any of my clients get fined, then I'll just pay it.

I did also try the dispensation route, but found I would get 3 page letters back, which only covered some expenses and which required someone to "approve" the sole director's expenses, every time they were paid.

I hope the consultation the Euan speaks about ends this nonsense.

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By DMGbus
21st Jun 2014 20:11

490 / EB48

Yes, I'm aware of what EB48 has recently said.   Presumably the plan is to put into law what the commonsense 490 guidance says at para 9.1 and 9.3.

 

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