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Please help P11D child benefit charge

P11D child benefit charge

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Hi all would appreciate any advice I have a salary sacrifice car through my employer which I pay for. However when filling in the P11D my employer does not make any reference to my payments for the car this means on my adjusted net income I end up paying back all of the child benefit as a charge. Over the phone 4 HMRC employees have said this is wrong but my employer refuses to amend the P11D saying it has done nothing wrong. HMRC is saying without the employer amending it can do nothing. How do I unblock this otherwise I am facing hefty tax charges for a car I am paying for.

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By Wanderer
26th Jan 2019 11:16

From what you have said so far your employer is correct and the 4 HMRC employees wrong.

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By lesley.barnes
26th Jan 2019 11:20

Speak to your union rep and see if they can intervene with your employer to sort it out. If HMRC have said that the NHS have to amend their P11D and your payroll department say they are correct you need to understand why payroll think they are correct.

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Replying to lesley.barnes:
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By Wanderer
26th Jan 2019 11:39

"HMRC" haven't said that though. Four untrained telephone operators have, who are basing it merely on what OP tells them over the phone. Neither the OP nor the HMRC 4 understand what the issues are.

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By Tax Dragon
26th Jan 2019 11:29

You're paying >£10,000 a year for the car? You could buy one for less.

Anyway, I'm with your employer and Wanderer and not with the HMRC 4.

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Scooby
By gainsborough
26th Jan 2019 12:29

Agree with Wanderer and Tax Dragon that your employer is correct. Doesn't sound like the HMRC employees understood that this was a salary sacrifice arrangement.

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By Navman
26th Jan 2019 13:35

Thanks for the replies all appreciate it
If the employer is correct in how the P11D is completed

It seems unfair to me that the adjusted net income is adding the list price of the car at £6.5k is perceived as extra income when calculating the child benefit tax charge
I am paying for the car at £5.7k pa so surely the difference needs to be my adjusted net income figure of £800 not the whole £6.5k
Surely the self assessment should have a way of adjusting for my payments for the car
Please let me know why I am wrong in thinking this along with the HMRC 4

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Replying to Navman:
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By Wanderer
26th Jan 2019 14:00

Navman wrote:

It seems unfair to me that the adjusted net income is adding the list price of the car at £6.5k is perceived as extra income when calculating the child benefit tax charge

Maybe but tax law isn't written on the basis of what you think may be unfair.
Navman wrote:
I am paying for the car at £5.7k pa so surely the difference needs to be my adjusted net income figure of £800 not the whole £6.5k
No you're not, You're having a salary sacrifice of 5.7k.
Navman wrote:
Surely the self assessment should have a way of adjusting for my payments for the car
See my previous answer
[quote=Navman]Please let me know why I am wrong in thinking this along with the HMRC 4
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Replying to Navman:
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By Wanderer
26th Jan 2019 14:16

Navman wrote:

Thanks for the replies all appreciate it
If the employer is correct in how the P11D is completed

It seems unfair to me that the adjusted net income is adding the list price of the car at £6.5k is perceived as extra income when calculating the child benefit tax charge

Maybe but tax law isn't written on the basis of what you think is unfair.
Navman wrote:
I am paying for the car at £5.7k pa so surely the difference needs to be my adjusted net income figure of £800 not the whole £6.5k
No you're not. You have a salary sacrifice of 5.7k.
Navman wrote:
Surely the self assessment should have a way of adjusting for my payments for the car
See my previous answer.
Navman wrote:
Please let me know why I am wrong in thinking this along with the HMRC 4

Because neither you nor the HMRC 4 understand the issues involved. But I'll give you a hint. The salary start point is AFTER the salary sacrifice has been deducted. The car benefit figure is then added to this to work out your taxable income for the HICB charge.
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Replying to Navman:
RLI
By lionofludesch
26th Jan 2019 16:42

Navman wrote:

Thanks for the replies all appreciate it
If the employer is correct in how the P11D is completed

It seems unfair to me that the adjusted net income is adding the list price of the car at £6.5k is perceived as extra income when calculating the child benefit tax charge
I am paying for the car at £5.7k pa so surely the difference needs to be my adjusted net income figure of £800 not the whole £6.5k
Surely the self assessment should have a way of adjusting for my payments for the car
Please let me know why I am wrong in thinking this along with the HMRC 4

It seems to me that you want two reductions for your salary sacrifice.

Firstly, you want it deducting from your income as a salary sacrifice.

Secondly, you want it deducting from the benefit declared on your P11D.

Not going to happen, I'm afraid.

To add to your woes, there's some new tax rules which mean that you'll be charged on the higher of the benefit in kind (£6.5k) and the amount of salary saacrificed (5.7k).

Not sure why you're so outraged at sacrificing £5.7k in salary to get a benefit worth £6.5k.

If you're not happy, buy your own car. Which is an option more and more people are taking.

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By Tax Dragon
26th Jan 2019 14:37

Plug Heaton v Bell into the search engine of your choice and you'll realise that this question was old before you were born.

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RLI
By lionofludesch
26th Jan 2019 14:58

OK - let's have some numbers.

What does your P60 say your gross income is ?

How much would your gross salary be if you didn't have this car ?

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