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P11D for owner managed companies

P11D for owner managed companies

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We have a number of small owner managed companies who pay for a number of expenses personally which are incurred wholly, exclusively and necessarily on behalf of the company and do not attract a tax or NI liability.  Expenses for example are telephone calls, stationery, stock etc.

In practice, is it necessary to fill in the P11D?  What is the view of HMRC of not filling in the form, if they became aware of it in an enquiry?

Any experiences with this situation gratefully received.

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By Steve Knowles
06th Apr 2011 13:02

dispensation

Apply for a dispensation, then you don't have to worry about it.

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By dreamcatcher
06th Apr 2011 14:49

Dispensation, but

A dispensation would solve your problem going forward, but as a general rule HMRC do not back date dispensation applications to cover earlier years.  So for example if you apply today it will cover the 2011/12 tax year onwards.

Technically for earlier years which are affected forms P11D should be prepared along with an appropiate section 336 claim.  In answer to your question I have never seen a penalty leived for failure to file a P11D where there are no tax/NI liabilities.  However in my recent experience HMRC seem more keen than ever to impose penalties where ever they can.

My advice would be get the clients to dig the information out for you and prepare the P11Ds, but in the mean time apply for dispensations.  It is really worth the hassle should HMRC pick up on this.

 

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By BBK
06th Apr 2011 14:57

P11D forms

Dear Steve and Chris,

This is exactly the conclusion I came to. 

I have not heard about penalties but am nervous that it might cause problems at some point in the future.

I will follow the advice from you both.

Thanks a lot!

 

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By petersaxton
06th Apr 2011 21:57

Certain expenses

Remember that dispensations only relate to certain expenses so you have to review the expenses for non-dispensation items.

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By BBK
07th Apr 2011 14:28

P11 D returns are they necessary

Well one situation transpires to be rather tricky.

One director of the owner managed companies is working from home.  The company is registered at his home address from where he conducts all his business.  So the business premises are also the of the company director's home.

He recently converted his garage to an office and has claimed for all conversion expenses, office equipment etc. from the company.

If the benefit is provided elsewhere than the employer's premises (that must include the employee own home) it says in the revenue guidance that the employee cannot make a non taxable claim for 'extention, conversion or alteration of living accommodation or a building on land adjacent to it, or the constrruction of a building on such land'.

So which is it to be?

 

 

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By petersaxton
07th Apr 2011 17:34

Benefit or expenses?

"If the benefit is provided elsewhere than the employer's premises"

Why is it a benefit? I would have thought these were expenses.

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