Company car tax etc
Discussion
Let me start by saying I don't understand tax at all!!
I think I've cocked up in part. Between my two employers in '07 I registered as SE to do some consultancy work. So for year '07-'08 I had to do a self-assessment. It seems I've been a complete plonker, as I mustn't have put in the details for my current employers, so approximately Nov '07 to the April '08. Ok so it appears I owe some tax for that and I don't have a problem with that.
My issue is that it appears I've never been taxed at all for my company car or fuel, so a BIK of approx £3.3K - which is where my gripe lies...
And then to top it off the tax woman started talking about student loans...
I think I've cocked up in part. Between my two employers in '07 I registered as SE to do some consultancy work. So for year '07-'08 I had to do a self-assessment. It seems I've been a complete plonker, as I mustn't have put in the details for my current employers, so approximately Nov '07 to the April '08. Ok so it appears I owe some tax for that and I don't have a problem with that.
My issue is that it appears I've never been taxed at all for my company car or fuel, so a BIK of approx £3.3K - which is where my gripe lies...
And then to top it off the tax woman started talking about student loans...
This is a company car for the period you were employed PAYE by someone elses firm I presume - i.e. Nov 07 to April 08 - and their payroll has failed to deduct tax for the BiK?
Probably not a lot you can do, but if you can't afford to pay I would expect the tax office would look at things sympathetically - i.e. payment plan and interest rather than penalties...
Probably not a lot you can do, but if you can't afford to pay I would expect the tax office would look at things sympathetically - i.e. payment plan and interest rather than penalties...
Sorry, perhaps I confused it with my babbling!
I started at my (still current) company in the November 2007. For the period from then, until the end of that tax year (April 2008), it seems that they've failed to deduct the relevant tax for company car and fuel during that period. From the April payslip, my tax went up significantly. Also they didn't tax student loans (circa £200/month) in the earlier period, so apparently there's six months owed on that.
So annoying, and as you say I think it's just a case I'm going to have to stump up - luckily we've had a little windfall so I think that's where it headed. The woman at the HMRC said it wouldn't be possible to do a payment plan, but I would get six months to pay it. And I would get a fine of 10% of the tax owed
Happy Christmas...
(luckily I'd already bought the wife's Xmas present...)
ETA - Eric - yes I have a P11D which provides the exact figures HMRC have quoted that I owe tax on - hence now away from my original query - I think it's just a cock-up that I now need to just stump up on.
I started at my (still current) company in the November 2007. For the period from then, until the end of that tax year (April 2008), it seems that they've failed to deduct the relevant tax for company car and fuel during that period. From the April payslip, my tax went up significantly. Also they didn't tax student loans (circa £200/month) in the earlier period, so apparently there's six months owed on that.
So annoying, and as you say I think it's just a case I'm going to have to stump up - luckily we've had a little windfall so I think that's where it headed. The woman at the HMRC said it wouldn't be possible to do a payment plan, but I would get six months to pay it. And I would get a fine of 10% of the tax owed
Happy Christmas...(luckily I'd already bought the wife's Xmas present...)
ETA - Eric - yes I have a P11D which provides the exact figures HMRC have quoted that I owe tax on - hence now away from my original query - I think it's just a cock-up that I now need to just stump up on.
Edited by muppetdave on Monday 21st December 15:54
muppetdave said:
I started at my (still current) company in the November 2007. For the period from then, until the end of that tax year (April 2008), it seems that they've failed to deduct the relevant tax for company car and fuel during that period.
Do you think HMRC are mind-readers?Deva Link said:
muppetdave said:
I started at my (still current) company in the November 2007. For the period from then, until the end of that tax year (April 2008), it seems that they've failed to deduct the relevant tax for company car and fuel during that period.
Do you think HMRC are mind-readers?muppetdave said:
Deva Link said:
muppetdave said:
I started at my (still current) company in the November 2007. For the period from then, until the end of that tax year (April 2008), it seems that they've failed to deduct the relevant tax for company car and fuel during that period.
Do you think HMRC are mind-readers?
(a) Did your employer complete and submit a correctly filled in Form P11D showing the correct details of the copmpany car that you had for the periods covered by the P11D?
b) Did your employer FAIL to do the above?
c) If a), did HMRC fail to act correctly on the details given to them by your employer.
I had a client where situation a) happened. In other words, the employer provided HMRC with all the correct documentation and details. However, HMRC didn't adjust the employee's PAYE Notices of Coding for THREE YEARS. Unfortunately, the employee also failed to notice that the coding wasn't correcttly reflecting the fact that they had a company car.
In this situation, the employee had to pay the underpaid tax (of around £6,000). However, because HMRC had also failed in their duty to process the P11Ds correctly, they waived any late filing penalties and charges as well as any interest charges.
Make sure they don't stiff you for penalties or interest.
b) Did your employer FAIL to do the above?
c) If a), did HMRC fail to act correctly on the details given to them by your employer.
I had a client where situation a) happened. In other words, the employer provided HMRC with all the correct documentation and details. However, HMRC didn't adjust the employee's PAYE Notices of Coding for THREE YEARS. Unfortunately, the employee also failed to notice that the coding wasn't correcttly reflecting the fact that they had a company car.
In this situation, the employee had to pay the underpaid tax (of around £6,000). However, because HMRC had also failed in their duty to process the P11Ds correctly, they waived any late filing penalties and charges as well as any interest charges.
Make sure they don't stiff you for penalties or interest.
If his tax code was correct from April 2008 then HMRC must have had the right details and they wouldn't have had a P11D by then (as he only started in the previous November).
I don't know how it works for new employees, but I know there's the form I referred to, P46, if you change cars during the year - presumeably there's something similar the employer sends off to HMRC for new employees?
I don't know how it works for new employees, but I know there's the form I referred to, P46, if you change cars during the year - presumeably there's something similar the employer sends off to HMRC for new employees?
Deva Link said:
If his tax code was correct from April 2008 then HMRC must have had the right details and they wouldn't have had a P11D by then (as he only started in the previous November).
I don't know how it works for new employees, but I know there's the form I referred to, P46, if you change cars during the year - presumeably there's something similar the employer sends off to HMRC for new employees?
Maybe I'm just being dumb. To fully understand his correct situation he needs to set out a table showing his employments between the various relevant dates and the various company cars he had between those dates.I don't know how it works for new employees, but I know there's the form I referred to, P46, if you change cars during the year - presumeably there's something similar the employer sends off to HMRC for new employees?
There was no change of cars during the time we're talking about, and as stated there was another form provided when I did change cars *this* year (so irrelevant to this conversation).
I went to work November 2007 - April 2008 (I am still with said company but doesn't matter here), there was no change of cars involved. It appears to me that *someone* hasn't updated HMRC records - I have an inkling it's our FD. My code only changed in April, a P11D was done around this time also.
Does this help?
I went to work November 2007 - April 2008 (I am still with said company but doesn't matter here), there was no change of cars involved. It appears to me that *someone* hasn't updated HMRC records - I have an inkling it's our FD. My code only changed in April, a P11D was done around this time also.
Does this help?
muppetdave said:
There was no change of cars during the time we're talking about, and as stated there was another form provided when I did change cars *this* year (so irrelevant to this conversation).
I went to work November 2007 - April 2008 (I am still with said company but doesn't matter here), there was no change of cars involved. It appears to me that *someone* hasn't updated HMRC records - I have an inkling it's our FD. My code only changed in April, a P11D was done around this time also.
Does this help?
When a company car changes DURING a tax year, the employer is supposed to fill in a special form called a P46 (Car).Confusingly, this form has nothing to do with the Form P46 that a new employee completes if they arive at a new job.I went to work November 2007 - April 2008 (I am still with said company but doesn't matter here), there was no change of cars involved. It appears to me that *someone* hasn't updated HMRC records - I have an inkling it's our FD. My code only changed in April, a P11D was done around this time also.
Does this help?
The P46 (Car) needs to be sent in within 14 days of the end of the PAYE quarter in which the car was changed. For example, if a car was changed on 28 July 2009, this happened in the PAYE quarter ended 5 October 2009. This would oblige the employer to submit the relevant P46 (Car) by 19 October 2009.
Check with your employers to see if they submitted the P46 (Car) when they should have.
At the end of the tax year (5 April), they complete the P11D. This contains the same information regarding company cars that should have already been submitted on the P46 (Car) earlier in the year. The P11D also picks up the other Benefits in Kind outside of company cars.
The due date for submitting P11Ds is the 6th July follwing the previous 5th April.
If HMRC had to wait until 6th July 2010 to find out about a car BIK that had been in place since 28 July 2009, you can see how the PAYE coding for that individual can get out of step.
You started work in November 2007. If you received a company car on or around that date, that counts as a company car "change" as the car was allocated to you part way through that particular tax year (2007/08).
If the employer failed to send in a P46 (Car) in January 2008 showing this change, HMRC may not have found out about you and the company car until July 2008 - when the P11D was submitted.
That means, your 2007/08 PAYE coding would have been wrong as it didn't show the company car you had between November 2007 and 5 April 2008.
Your 2008/09 PAYE coding may also have been wrong as they would not have known about the company car when the 2008/09 coding was issued in January 2008.
They MIGHT have corrected it in July 2008 when they received the P11D but HMRC cannot be guranteed to pick these things up. A change to your 2008/09 coding would only have ensured you were paying the correct tax for 2008/09 and would not have fixed the unpaid tax situation for 2007/08.
Edited by Eric Mc on Monday 21st December 17:55
Edited by Eric Mc on Monday 21st December 17:56
That all looks about right in terms of timings, and I now understand what you mean about the 'change' in company car, I didn't realise the pertinence of that quite - I wasn't trying to be obstructive!
Thanks for your helps guys, sadly as I say it looks like it's going to cost me to pay it back, but is just one of those curveballs that occasionally crops up. Thanks for helping me to understand it better.
David
Thanks for your helps guys, sadly as I say it looks like it's going to cost me to pay it back, but is just one of those curveballs that occasionally crops up. Thanks for helping me to understand it better.
David
A couple of years back I had an issue with an employee's car and his tax. HMRC told me that they don't actually act on the majority of p46(Car)s because they have too much paperwork.
They advised me (and I advised my employees in turn) that the employee should take responsibility for checking they're being taxed correctly, and to advise HMRC if they're not.
Apparently, HMRC would act on the emplooye's communication, if not the employers....
They advised me (and I advised my employees in turn) that the employee should take responsibility for checking they're being taxed correctly, and to advise HMRC if they're not.
Apparently, HMRC would act on the emplooye's communication, if not the employers....
Doofus said:
A couple of years back I had an issue with an employee's car and his tax. HMRC told me that they don't actually act on the majority of p46(Car)s because they have too much paperwork.
They advised me (and I advised my employees in turn) that the employee should take responsibility for checking they're being taxed correctly, and to advise HMRC if they're not.
Apparently, HMRC would act on the emplooye's communication, if not the employers....
Sadly, that rings so true.They advised me (and I advised my employees in turn) that the employee should take responsibility for checking they're being taxed correctly, and to advise HMRC if they're not.
Apparently, HMRC would act on the emplooye's communication, if not the employers....
They insist that the employers follow the rules and regulations - and fine them if they don't - but often fail to act on the information provided by the employers. Employees should ALL do a basic course on taxatrion and how it works - especially the PAYE system and the way codings are arrived at.
Eric Mc said:
Doofus said:
A couple of years back I had an issue with an employee's car and his tax. HMRC told me that they don't actually act on the majority of p46(Car)s because they have too much paperwork.
They advised me (and I advised my employees in turn) that the employee should take responsibility for checking they're being taxed correctly, and to advise HMRC if they're not.
Apparently, HMRC would act on the emplooye's communication, if not the employers....
Sadly, that rings so true.They advised me (and I advised my employees in turn) that the employee should take responsibility for checking they're being taxed correctly, and to advise HMRC if they're not.
Apparently, HMRC would act on the emplooye's communication, if not the employers....
They insist that the employers follow the rules and regulations - and fine them if they don't - but often fail to act on the information provided by the employers. Employees should ALL do a basic course on taxatrion and how it works - especially the PAYE system and the way codings are arrived at.
Regarding looking after your own tax: that makes sense too - employers don't know all your circumstances that would determine your tax code - you could have rental income etc or unpaid or overpaid tax from previous year.
i now ring them up instantly the second anything changes in the way of BIK's
When i changed jobs it took HMRC 18months to move my files from one tax office to another, so i was on W1 tax for that whole time.
So i had underpaid the first year. So then they stuck me on a K code to pay off the difference. Then when the 10% IT debacle happened where standard rate tax payers where better off and higher rate tax payers had no change i had an extra £20 a month taken off my cos of the k code. So i paid too much tax. Then this year i relinquished the car. So f
k knows where i am. Will have to review my P60 in April.
When i changed jobs it took HMRC 18months to move my files from one tax office to another, so i was on W1 tax for that whole time.
So i had underpaid the first year. So then they stuck me on a K code to pay off the difference. Then when the 10% IT debacle happened where standard rate tax payers where better off and higher rate tax payers had no change i had an extra £20 a month taken off my cos of the k code. So i paid too much tax. Then this year i relinquished the car. So f
k knows where i am. Will have to review my P60 in April.Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff