Discussion
Hi all, need some help!
I do self assessment every year in order to claim back the higher-rate tax relief on my pension contributions. I also include my mileage and other appropriate allowances, and usually this is fairly straight forward.
However, unlike previous years, I am expecting a P11D value of around £2k this year, which I know always comes in AFTER the tax year ends and before 6th July.
Therefore, I’m confused how this works with regards to my total taxable income for TY23/24 and when I actually pay the tax on the benefits listed on the P11D:
1. If theoretically I didn’t use self assessment, how would the tax due on this “extra” £2k be paid? Would my personal allowance be adjusted for the following year?
2. If using self assessment, which I plan to do, do I include the P11D values in this self assessment, or the next tax year’s self assessment?
My confusion is caused by the fact that I usually promptly complete my self assessment as soon as the tax year ends. But because I’m expecting this P11D, I’m unsure whether I should wait for it to come through, or just crack on and just complete self assessment.
My thoughts are that there must be people every year who make pension contributions in order to keep their adjusted net income under certain amounts, who then get hit with an unexpected P11D which then takes their adjusted net income over a particular threshold.
I do self assessment every year in order to claim back the higher-rate tax relief on my pension contributions. I also include my mileage and other appropriate allowances, and usually this is fairly straight forward.
However, unlike previous years, I am expecting a P11D value of around £2k this year, which I know always comes in AFTER the tax year ends and before 6th July.
Therefore, I’m confused how this works with regards to my total taxable income for TY23/24 and when I actually pay the tax on the benefits listed on the P11D:
1. If theoretically I didn’t use self assessment, how would the tax due on this “extra” £2k be paid? Would my personal allowance be adjusted for the following year?
2. If using self assessment, which I plan to do, do I include the P11D values in this self assessment, or the next tax year’s self assessment?
My confusion is caused by the fact that I usually promptly complete my self assessment as soon as the tax year ends. But because I’m expecting this P11D, I’m unsure whether I should wait for it to come through, or just crack on and just complete self assessment.
My thoughts are that there must be people every year who make pension contributions in order to keep their adjusted net income under certain amounts, who then get hit with an unexpected P11D which then takes their adjusted net income over a particular threshold.
The P11D benefit should be added to the year that it relates. In my case that means I don’t do my tax return until I’ve received my P11D (also my pension benefits statement) as I effectively add that onto my self assessment for the year just gone.
It’s a long time since I’ve not had to self-assess but I think your guess is right for those circumstances: just updated via tax code and reclaimed from current year. I’m sure someone more knowledgeable will know.
It’s a long time since I’ve not had to self-assess but I think your guess is right for those circumstances: just updated via tax code and reclaimed from current year. I’m sure someone more knowledgeable will know.
If you didn't do SA then, yes, your tax code would get adjusted. That might have already happened -I think employers have to notify HMRC quarterly.
Are you geting the full personal allowance tax code?
We used to do a thing called "payrolling" the benefit - it's something like the value gets added to your salary and then taxed. I think that's becoming mandatory.
But your main problem is doing the tax return too early - I do mine in the Christmas break!
Are you geting the full personal allowance tax code?
We used to do a thing called "payrolling" the benefit - it's something like the value gets added to your salary and then taxed. I think that's becoming mandatory.
But your main problem is doing the tax return too early - I do mine in the Christmas break!
basherX said:
The P11D benefit should be added to the year that it relates. In my case that means I don’t do my tax return until I’ve received my P11D (also my pension benefits statement) as I effectively add that onto my self assessment for the year just gone.
It’s a long time since I’ve not had to self-assess but I think your guess is right for those circumstances: just updated via tax code and reclaimed from current year. I’m sure someone more knowledgeable will know.
Thank you, this makes sense.It’s a long time since I’ve not had to self-assess but I think your guess is right for those circumstances: just updated via tax code and reclaimed from current year. I’m sure someone more knowledgeable will know.
I just wondered what would theoretically happen if you did your self assessment as soon as the tax year ends (as is your right), but then get hit with a “forgotten” and sizeable P11D.
I’ll wait for it to arrive and include it. Thank you.
Traditionally, for those who DON'T complete Self Assessment tax returns, the vast bulk of people who have a work related benefit in kind, have had the benefit taxed in the year AFTER they actually received the benefit.
This is because HMRC only ever found out about the benefit being given to an employee when the employer notified HMRC - which was through the form P11D and this was always submitted AFTER the tax year had already ended.
For instance, if an employee received a benefit of (say) Medical Insurance of £1,000 in tax year 2022/23, the employer would notify HMRC about this 2022/23 benefit sometime after 5 April 2023 (but before 6 July 2023).
HMRC would then amend the employee's 2023/24 PAYE Coding to collect the tax due on the 2022/23 benefit.
Ther main exception to this was in respect of company cars.
Company cars needed to be notified to HMRC, by the employer, WITHIN the tax year to which the benefit related. A special form called a P46 (Car) was invented to allow employers to make this notification within the tax year. The reason why cars were treated differently is because company cars tended to be the highest value of benefit available to employees and they also have a habit of changing during the tax year as cars were replaced/renewed etc.
Nowadays, employers can escape the whole P11D rigmaroll by "payrolling" benefits in kind. This means that the current payroll and related PAYE calculations autromatically take into account the value of the ACTUAL BIK being applied to the employee (not last year's BIK value). However, in order to do this, the employer has to jump through some hoops and many don't bother.
It's explained here -
https://www.gov.uk/guidance/payrolling-tax-employe...
This is because HMRC only ever found out about the benefit being given to an employee when the employer notified HMRC - which was through the form P11D and this was always submitted AFTER the tax year had already ended.
For instance, if an employee received a benefit of (say) Medical Insurance of £1,000 in tax year 2022/23, the employer would notify HMRC about this 2022/23 benefit sometime after 5 April 2023 (but before 6 July 2023).
HMRC would then amend the employee's 2023/24 PAYE Coding to collect the tax due on the 2022/23 benefit.
Ther main exception to this was in respect of company cars.
Company cars needed to be notified to HMRC, by the employer, WITHIN the tax year to which the benefit related. A special form called a P46 (Car) was invented to allow employers to make this notification within the tax year. The reason why cars were treated differently is because company cars tended to be the highest value of benefit available to employees and they also have a habit of changing during the tax year as cars were replaced/renewed etc.
Nowadays, employers can escape the whole P11D rigmaroll by "payrolling" benefits in kind. This means that the current payroll and related PAYE calculations autromatically take into account the value of the ACTUAL BIK being applied to the employee (not last year's BIK value). However, in order to do this, the employer has to jump through some hoops and many don't bother.
It's explained here -
https://www.gov.uk/guidance/payrolling-tax-employe...
Thank you all. I needed to keep my adjusted net earnings under a certain amount so needed to be sure what pension contribution to make and wondered how the P11D changes things. The pension contribution has of course now been made.
Fortunately, I’ve kept track of what to expect so ensured my pension contribution(s) covered the surplus amount required.
I imagine lots of people forget about their P11D and get hit with the subsequent earnings implications!
Fortunately, I’ve kept track of what to expect so ensured my pension contribution(s) covered the surplus amount required.
I imagine lots of people forget about their P11D and get hit with the subsequent earnings implications!
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