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reporting BIK for unpaid director

director with company car but not employed by his own company

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Interesting one here. I have a client who is a director of his new company (A) but is not on its payroll as he works for another non related company (B) on their payroll. He is just drawing dividends at present until business takes off and is building up stock for resale eventually.

He has bought a company car for his own company(A) but how does he report his BIK if he's not on his own company's payroll and the car has nothing to do with the company he is employed by (B) ?

Many thanks

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By Tax Dragon
23rd Apr 2021 12:37

P11d?

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Replying to Tax Dragon:
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By paul.benny
23rd Apr 2021 12:40

If director is unpaid and is the only employee, there's no PAYE scheme. You may have to register a PAYE scheme and do nil RTI submissions.

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Replying to paul.benny:
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By Tax Dragon
23rd Apr 2021 12:49

But that won't report the car, will it? (Not my day-job, wouldn't know.) Question was how to report the car.

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Replying to Tax Dragon:
A Putey FACA
By Arthur Putey
23rd Apr 2021 12:50

With luck it will be an electric van!

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By Tax Dragon
23rd Apr 2021 12:38

P46?

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Replying to Tax Dragon:
RLI
By lionofludesch
25th Apr 2021 06:31

Tax Dragon wrote:

P46?

Not like you to be so out of date.

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By Tax Dragon
23rd Apr 2021 12:39

Both?

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A Putey FACA
By Arthur Putey
23rd Apr 2021 12:49

philcollis wrote:

He is just drawing dividends at present until business takes off ...


Out of what?
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A Putey FACA
By Arthur Putey
23rd Apr 2021 12:54

I would say that the provision of a BIK requires the company to register for PAYE in order to get a reference under which a P11Db can be filed.

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Replying to Arthur Putey:
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By Tax Dragon
23rd Apr 2021 13:05

Citation?

JOKE! :-)

Sounds logical.

And Paul agreed.

Can't believe I was so easily duped by

philcollis wrote:

Interesting one here.

Thanks (1)
Replying to Tax Dragon:
A Putey FACA
By Arthur Putey
24th Apr 2021 17:15

Tax Dragon wrote:

Citation?


If you must:
https://en.wikipedia.org/wiki/Chevrolet_Citation
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Replying to Arthur Putey:
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By Jon Endeacott
23rd Apr 2021 14:00

Agree with Arthur. I experienced this last year, and this was exactly what HMRC advised me to do.

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By johngroganjga
23rd Apr 2021 13:13

You say he has bought a car for company A. Do you mean company A had bought a car for him to use?

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Replying to johngroganjga:
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By The Dullard
23rd Apr 2021 14:08

I put it to you that he is the individual responsible for making the purchasing decisions for Company A, but that he makes those decisions for love, rather than reward.

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Replying to johngroganjga:
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By philcollis
23rd Apr 2021 14:38

Yes - the car was purchased through the company.

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By The Dullard
23rd Apr 2021 14:07

Define "interesting"?

Phil meet ITEPA 2003, s 5. ITEPA 2003, s 5 meet Phil.

Phil ITEPA 2003, s 5 says "Phil you're really gong to need to do all that it involves (as suggested by all the other nice folk) to fill a fri88ing P11D for this chap."

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By philcollis
23rd Apr 2021 14:36

to Arthur Putey...Out of what?
A further complication - he is invoicing consultancy work (as a numismatist) but is using this money to build up stock for eventual resale (he is still employed by his main employer)

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Replying to philcollis:
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By paul.benny
23rd Apr 2021 15:58

Doesn't sound like a complication to me.
Unless this is a third activity alongside main job and own-company-providing-a-car-but-no-salary.

Does sound like 'client' needs some help with basic tax planning... cars are rarely a tax efficient way of extracting funds from company. Why has 'client' even chosen to operate through a company?

It must be a lucrative business though. Consultancy and coin trading are generating all this income in spare time from main job.

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Replying to philcollis:
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By RetiredTax
23rd Apr 2021 16:53

"Consultancy work as a numismatist". ??
Must be coining it in !!

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Replying to RetiredTax:
A Putey FACA
By Arthur Putey
24th Apr 2021 17:18

Cash in hand too!

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Replying to philcollis:
A Putey FACA
By Arthur Putey
24th Apr 2021 17:18

But without a PAYE scheme neither he nor his employer will be paying his stamp.

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By Paul Crowley
25th Apr 2021 14:23

Always interesting when clients think they deserve a free car, 19% financed by the taxpayer.

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