Discussion
Big Fluffy One said:
When a driver who is caught speeding gets a 3rd party to take their points, both parties can find themselves in front of the beak for PCOJ.
What about a situation where a driver asks his employer to pay his speeding fine and the employer agrees. Same position?
of course Employer can pay but cannot set this costs as a business expense under HMRC rulesWhat about a situation where a driver asks his employer to pay his speeding fine and the employer agrees. Same position?
No! Provided the fine gets paid, I doubt they would care.
However, I would think that the employer would have to account for it by submitting to the inland rev that you have been paid that extra amount (in that months salary)in his normal returns, or register that you got a benefit in kind at the end of the year PAYE return!
However, I would think that the employer would have to account for it by submitting to the inland rev that you have been paid that extra amount (in that months salary)in his normal returns, or register that you got a benefit in kind at the end of the year PAYE return!
daz3210 said:
I thought he could set it as an expense, but it becomes a benefit in kind on which the employee pays tax.
The payment made would attract BIK and Class 1 NIC contributions. I would be very surprised if the payment was eligible for tax relief as an expense. I think it would be non-allowable and added back for the tax calculation.KevinA4quattro said:
The payment made would attract BIK and Class 1 NIC contributions. I would be very surprised if the payment was eligible for tax relief as an expense. I think it would be non-allowable and added back for the tax calculation.
Why would it not be allowable as an employment expense when it is dealt with as part of an employee's wages. If you were to give the bloke cash via his payroll it would be allowable, just because it is paid direct to a third party it is little different.In fact, thinking back to my tax training at Uni I seem to recall a very similar question being posed, except the fine was for a parking offence. The answer was I believe that if paid on behalf of an employee it was an expense, if paid by/on behalf of the proprietor it was not.
We treat parking fines as business expenses and speeding and other moving traffic fines as personal to the driver. Yellow box fines we pay one per driver per 6 months.
We've never considered them P11D-able, and disallow any fines for tax.
Congestion charges (but not fines) are an allowable business expense.
We've never considered them P11D-able, and disallow any fines for tax.
Congestion charges (but not fines) are an allowable business expense.
Big Fluffy One said:
When a driver who is caught speeding gets a 3rd party to take their points, both parties can find themselves in front of the beak for PCOJ.
What about a situation where a driver asks his employer to pay his speeding fine and the employer agrees. Same position?
If I mention to my lottery-winning friend that I've just had a speeding ticket and he says "never mind mate, here's sixty quid", is that perverting the course of justice? Clue: noWhat about a situation where a driver asks his employer to pay his speeding fine and the employer agrees. Same position?
Breadvan72 said:
The expenditure is not necessary for the business, and so not allowable.
If that were the case it would be more beneficial to give the employee a £60 bonus in their pay packet.But ...........
HMRC state that where an employee pays a fine on behalf of an employee, it may be allowed in the computation of trading profits.
Thus I would argue it is allowable.
Edited by daz3210 on Thursday 27th September 22:07
I ran this past a friend who is both an accountant and a Magistrate (on the supplemental list as he is fond of stressing).
Even he had difficulty in reconciling the way he would treat it as an accountant with his opinion as a Magistrate.
By accepting that it is a legitmate expense which can be paid by an unconnected third party, albeit one which would not be allowed in the computation of a company's Corporation Tax liability, one would have to accept that a fine is no longer a punishment but a simple revenue gathering exercise.
Even he had difficulty in reconciling the way he would treat it as an accountant with his opinion as a Magistrate.
By accepting that it is a legitmate expense which can be paid by an unconnected third party, albeit one which would not be allowed in the computation of a company's Corporation Tax liability, one would have to accept that a fine is no longer a punishment but a simple revenue gathering exercise.
Big Fluffy One said:
I ran this past a friend who is both an accountant and a Magistrate (on the supplemental list as he is fond of stressing).
Even he had difficulty in reconciling the way he would treat it as an accountant with his opinion as a Magistrate.
By accepting that it is a legitmate expense which can be paid by an unconnected third party, albeit one which would not be allowed in the computation of a company's Corporation Tax liability, one would have to accept that a fine is no longer a punishment but a simple revenue gathering exercise.
Believe me it MAY be used in the calculation of company profits, and hence Corporation Tax Liability.Even he had difficulty in reconciling the way he would treat it as an accountant with his opinion as a Magistrate.
By accepting that it is a legitmate expense which can be paid by an unconnected third party, albeit one which would not be allowed in the computation of a company's Corporation Tax liability, one would have to accept that a fine is no longer a punishment but a simple revenue gathering exercise.
Take a look at:-
http://www.hmrc.gov.uk/manuals/bimmanual/bim42515....
HMRC said:
Where an employer pays fines that are the liability of an employee, so that the employee is assessable on the payment as employment income, the cost to the employer of paying the fines may be allowable in computing his trading profits.
But, yes I accept the comment about it no longer being a punishment.Edited by daz3210 on Friday 28th September 09:44
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