Discussion
I've just been sent a letter from HMRC about unpaid taxes on benefits listed under Entertainment / Travel & Subsistance / Multiple benefits. They claim that I owe them about £5200!
I'm a little confused by this as I thought that all my travel for business purposes wasn't considered a benefit and therefore I shouldn't be taxed on it.
The multiple benefits thing is confusing as well, as I have no idea what that actually means. I thought my health cover BIK was taken out as PAYE.
Could anybody shed any light on what these charges might actually be about?
I'm a little confused by this as I thought that all my travel for business purposes wasn't considered a benefit and therefore I shouldn't be taxed on it.
The multiple benefits thing is confusing as well, as I have no idea what that actually means. I thought my health cover BIK was taken out as PAYE.
Could anybody shed any light on what these charges might actually be about?
What has happened is that your employer has (probably correctly) returned to HMRC the Expenses Amounts that they have paid you in the form of reimbursements for tax year 2011/12. They would have notified HMRC using the P11D submission for 2011/12 - which they would have sent to HMRC sometime between 5 April 2012 and 6 July 2012.
The likelihood is that these amounts paid to you were to cover business related costs that you paid out of your own personal resources and subsequently reclaimned from your employer. These are therefore not really taxable on you personally.
However, it is up to YOU to notify HMRC that you should not be taxed on these amounts.
There are two ways to go about this.
One is to complete a Self Assessment tax return for tax year 2011/12 and enter the amounts shown on your 2011/12 P11D (your employer should have given you a copy of the P11D). If you complete all the correct boxes on the Self Assessment tax return, HMRC will then know not to tax you on these amounts.
If you don't normally complete Self Assessment tax returns, you will need to contact HMRC directly - either by phone or by letter - telling them the nature of these amounts and making the required claim to stop them taxing you on these amounts - the Section 336 claim mentioned above.
Do you normally complete Self Assessment tax returns?
If you do, have you completed and subnmitted the return for 2011/12?
The likelihood is that these amounts paid to you were to cover business related costs that you paid out of your own personal resources and subsequently reclaimned from your employer. These are therefore not really taxable on you personally.
However, it is up to YOU to notify HMRC that you should not be taxed on these amounts.
There are two ways to go about this.
One is to complete a Self Assessment tax return for tax year 2011/12 and enter the amounts shown on your 2011/12 P11D (your employer should have given you a copy of the P11D). If you complete all the correct boxes on the Self Assessment tax return, HMRC will then know not to tax you on these amounts.
If you don't normally complete Self Assessment tax returns, you will need to contact HMRC directly - either by phone or by letter - telling them the nature of these amounts and making the required claim to stop them taxing you on these amounts - the Section 336 claim mentioned above.
Do you normally complete Self Assessment tax returns?
If you do, have you completed and subnmitted the return for 2011/12?
Eric Mc said:
What has happened is that your employer has (probably correctly) returned to HMRC the Expenses Amounts that they have paid you in the form of reimbursements for tax year 2011/12. They would have notified HMRC using the P11D submission for 2011/12 - which they would have sent to HMRC sometime between 5 April 2012 and 6 July 2012.
The likelihood is that these amounts paid to you were to cover business related costs that you paid out of your own personal resources and subsequently reclaimned from your employer. These are therefore not really taxable on you personally.
However, it is up to YOU to notify HMRC that you should not be taxed on these amounts.
There are two ways to go about this.
One is to complete a Self Assessment tax return for tax year 2011/12 and enter the amounts shown on your 2011/12 P11D (your employer should have given you a copy of the P11D). If you complete all the correct boxes on the Self Assessment tax return, HMRC will then know not to tax you on these amounts.
If you don't normally complete Self Assessment tax returns, you will need to contact HMRC directly - either by phone or by letter - telling them the nature of these amounts and making the required claim to stop them taxing you on these amounts - the Section 336 claim mentioned above.
Do you normally complete Self Assessment tax returns?
If you do, have you completed and subnmitted the return for 2011/12?
Eric, I normally do fill out a self assessment, which is why I'm surprised this has come up. However, it's for the year 2010/11. They have said that I didn't enter anything from my P11D (Which may well be the case as I have clearly made a mistake here.) I thought I only had to declare things that I needed to pay BIK on. Which for that year, I thought was £0.The likelihood is that these amounts paid to you were to cover business related costs that you paid out of your own personal resources and subsequently reclaimned from your employer. These are therefore not really taxable on you personally.
However, it is up to YOU to notify HMRC that you should not be taxed on these amounts.
There are two ways to go about this.
One is to complete a Self Assessment tax return for tax year 2011/12 and enter the amounts shown on your 2011/12 P11D (your employer should have given you a copy of the P11D). If you complete all the correct boxes on the Self Assessment tax return, HMRC will then know not to tax you on these amounts.
If you don't normally complete Self Assessment tax returns, you will need to contact HMRC directly - either by phone or by letter - telling them the nature of these amounts and making the required claim to stop them taxing you on these amounts - the Section 336 claim mentioned above.
Do you normally complete Self Assessment tax returns?
If you do, have you completed and subnmitted the return for 2011/12?
I will have to get on the case with this for all years up to now as well, as the last 2 years have been chaos.
What I would do is resubmit a "Repaired" 2010/11 Self Assessment form with P11D related and the Expense in Employment Claim boxes filled in correctly.
Efectively, you fill in the same amounts twice in two different sets of boxes -
once to declare that the amounts were received from the employer (as already notified to HMRC by the employer on the P11D)
and then again as an "Expenses in Employment" claim - which is effectively your Section 336 claim.
Efectively, you fill in the same amounts twice in two different sets of boxes -
once to declare that the amounts were received from the employer (as already notified to HMRC by the employer on the P11D)
and then again as an "Expenses in Employment" claim - which is effectively your Section 336 claim.
Interestingly I've just found my P11D, which has a signed Section 336 claim on the back for the amounts that were missing from the Self Assessment form. So you think I should be able to put this down to an admin error and when I speak to the HMRC they will be able to accept a repaired Self Assessment?
Back in the old "pre-Self Assessment" era (i.e. 1994/95 and earlier), employers often used to hand-write on the P11Ds they submitted a note such as "Section 198 applies".
(In those days what we now refer to as Section 336 was called Section 198).
This was an informal request by the employer NOT to tax the employee on the details shown under expenses on the P11D.
Once Self Assessment came into force, HMRC informed all employers to stop this practice as under Self Assessment regulations, it was not the employer's place to make expense claims on behalf of their employees.
If the employee wanted to escape taxation on the expenses declared in the P11D, it was up to the employee to either enter the claim on a Self Assessment tax return or, if they didn't normally complete Self Assessment returns, to write separately in the form of a letter to HMRC.
If the employer TRIED to enter a Section 336 claim on your behalf on the P11D, HMRC had every right to ignore it.
(In those days what we now refer to as Section 336 was called Section 198).
This was an informal request by the employer NOT to tax the employee on the details shown under expenses on the P11D.
Once Self Assessment came into force, HMRC informed all employers to stop this practice as under Self Assessment regulations, it was not the employer's place to make expense claims on behalf of their employees.
If the employee wanted to escape taxation on the expenses declared in the P11D, it was up to the employee to either enter the claim on a Self Assessment tax return or, if they didn't normally complete Self Assessment returns, to write separately in the form of a letter to HMRC.
If the employer TRIED to enter a Section 336 claim on your behalf on the P11D, HMRC had every right to ignore it.
theboyfold said:
Interestingly I've just found my P11D, which has a signed Section 336 claim on the back for the amounts that were missing from the Self Assessment form. So you think I should be able to put this down to an admin error and when I speak to the HMRC they will be able to accept a repaired Self Assessment?
You can "repair" (in other words amend and correct) your tax return for 2010/11 online until 31 January 2013. You have until 31 January 2014 to repair the 2011/12 tax return though obviously with HMRC assessing the expense reimbursements this will need attending to without delay in your case.If you are unsure what boxes on your Employment pages require completion, Pm me and I can take you through it.
David
Gassing Station | Finance | Top of Page | What's New | My Stuff