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P11D completion for shared car

P11D completion for shared car

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Hello,

A client has a single company car to be shared (by husband and wife directors) on a % basis agreed by the client to reasonably reflect actual use.

We use Moneysoft Payroll. Is it acceptable to amend the days available (as show on the P11D) to arrive at the apportioned benefit?

If not, what is the correct procedure for this?

Many thanks

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19th Jun 2019 13:23

Have a look at para 12.38 of Tome 480.

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to lionofludesch
19th Jun 2019 13:48

Hi, thanks for the reply. I am aware of what I need to do it's more of a question of how.

I called Moneysoft who said their software will not deal with this.

My thoughts were a workaround involving adjustments to the days available in the software to arrive at the correct charge for each individual but I wondered if this could have unforeseen consequences.

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to bettybobbymeggie
19th Jun 2019 13:56

So how do I show the reduction for the shared car?

Or will I need to file a paper copy?

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to bettybobbymeggie
19th Jun 2019 13:56

So how do I show the reduction for the shared car?

Or will I need to file a paper copy?

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to CWservices6064
19th Jun 2019 14:48

Good question - but you'll have the same issue with the paper form given there is no obvious place for this kind of apportionment. Personally I would enter an amount paid by the employee but it's the same result as adjusting the dates.

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19th Jun 2019 15:21

How about fudging it by changing the car price to something that gives the correct answer?

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19th Jun 2019 15:32

I used to deal with a case like this and sent in paper forms with the full amounts crossed out and 50% written in large figures. I also sent a covering letter but each year I would phone up as they inevitably taxed them on 100% each.

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20th Jun 2019 11:31

@ CWservices 6064 (OP).

(1) Your original question:-

“Is it acceptable to amend the days available (as show on the P11D) to arrive at the apportioned benefit?”

(2) Your post at 13.48:-

“My thoughts were a workaround involving adjustments to the days available in the software to arrive at the correct charge for each individual but I wondered if this could have unforeseen consequences.”

Unless I am missing something, amending the days available is simply the CORRECT method for completing the forms. The underlying principle is that each of two directors is granted availability of the car for “one day out of two”, ie for 182.5 (183 in a leap year) days. Hence, the only element of “workaround” is that, for simplicity, one would assume (as theoretically could be the case) that the car is made available to the Husband for the first 182/183 days and is then made available to the Wife for the last 183 days.

Since the “end product” is benefit figures which comply with the “just and reasonable” apportionment concept required by HMRC, then there should be NO “unforeseen consequences”.

It is most certainly “acceptable” to “amend the days available”.

If you are nervous at the possibility of subsequent challenge by HMRC, then a simple letter to them (dated on or after the date of submission of the P11D forms), advising them of the methodology adopted, will cover you/your clients.

Basil.

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20th Jun 2019 09:52

By way of an update I have spoken to a HMRC technical officer who said that manual P11Ds must be prepared with a covering letter explaining why a % of the total benefit has been allocated to each employee. If the car was shared throughout the year then the 'Dates car was available' should be left blank on each P11D.

What a waste of time and highlights the constraints of software.

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to CWservices6064
20th Jun 2019 10:01

It's a "computer says no" age, sadly.

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to Tax Dragon
20th Jun 2019 10:12

We're a long way off computers being smart.

They still do as humans tell them - no matter how stupid that might be.

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to lionofludesch
20th Jun 2019 11:10

Good point - a world where computers don't do what they're told could be even scarier. But it still feels like I'm the one having to meet their requirements, not that they try to meet mine. I can't even turn this one on unless I type the right characters in the right order at the right time….:-p

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to CWservices6064
20th Jun 2019 11:07

CWservices6064 wrote:

By way of an update I have spoken to a HMRC technical officer who said that manual P11Ds must be prepared with a covering letter explaining why a % of the total benefit has been allocated to each employee. If the car was shared throughout the year then the 'Dates car was available' should be left blank on each P11D.

What a waste of time and highlights the constraints of software.

Just as I said but be aware that they will put the full 100% in their tax codes and not 50%.

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