This looks wrong to me. If it is part of the margin scheme, there should not be any VAT shown on the invoice. However, if it is a new van, I don't think it can be part of the margin scheme (the dealer is surely over the VAT threshold).
However, he logs all his business mileage and has his own car which he uses for almost all of his private mileage.
There is virtually no private mileage in his company car, and the small number of private miles that he does in the company car, he pays his employer for.
Doesn't this arrangement mean that he gets no private use for which he is not paying? Is it right that he should be taxed on a BIK?
I realise that we have no OBLIGATION as an employer, but in practice, if we want to retain the employee, and make them feel valued, it seems right that we do whatever we can to help them.
Many thanks, fawltybasil2575. Yes, my question, as an employer, relates to a part time staff member, who we have to tax at BR code, based on the starter checklist, but who expects that their total earnings for the year will be well under their personal allowance. So, your answer suggests that the employee can contact the tax office to ask them to allocate their tax code differently.
As it happens, I am considering outsourcing the payroll of a new self employed business that has just started hiring staff. I am undecided whether to outsource or use the free software listed on the HMRC website (12Coud, etc). There are currently 2 employees, both on zero hours contracts, neither of whom earns more than £116 per week. Not yet set up a PAYE scheme. What would you advise?
My answers
This looks wrong to me. If it is part of the margin scheme, there should not be any VAT shown on the invoice. However, if it is a new van, I don't think it can be part of the margin scheme (the dealer is surely over the VAT threshold).
Thank you, Lionofludesc.
OK, I understand the principles.
However, he logs all his business mileage and has his own car which he uses for almost all of his private mileage.
There is virtually no private mileage in his company car, and the small number of private miles that he does in the company car, he pays his employer for.
Doesn't this arrangement mean that he gets no private use for which he is not paying? Is it right that he should be taxed on a BIK?
Thank you, once again, Basil.
I realise that we have no OBLIGATION as an employer, but in practice, if we want to retain the employee, and make them feel valued, it seems right that we do whatever we can to help them.
Thank you for your comment, memyself-eye. However, Mr Fawlty's reply was much more helpful.
Many thanks, fawltybasil2575. Yes, my question, as an employer, relates to a part time staff member, who we have to tax at BR code, based on the starter checklist, but who expects that their total earnings for the year will be well under their personal allowance. So, your answer suggests that the employee can contact the tax office to ask them to allocate their tax code differently.
As it happens, I am considering outsourcing the payroll of a new self employed business that has just started hiring staff. I am undecided whether to outsource or use the free software listed on the HMRC website (12Coud, etc). There are currently 2 employees, both on zero hours contracts, neither of whom earns more than £116 per week. Not yet set up a PAYE scheme. What would you advise?