P11d - Vouchers and credit cards
Poodle
Registered Posts: 711
Hi,
I never can remember this.
If a director in a close company has a company bank account 'debit' card and uses the card to pay business expenses (no dispensation in place) do these transactions get reported in section 'C' or 'N' on the P11d, under other expenses or since they are general business expenses e.g. stationery, online company purchases etc. could they be ignored and not reported at all?
What if he uses the debit card to pay his overnight accommodation for business travel?
I never can remember this.
If a director in a close company has a company bank account 'debit' card and uses the card to pay business expenses (no dispensation in place) do these transactions get reported in section 'C' or 'N' on the P11d, under other expenses or since they are general business expenses e.g. stationery, online company purchases etc. could they be ignored and not reported at all?
What if he uses the debit card to pay his overnight accommodation for business travel?
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Comments
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No P11d report I would say as it is merely standard use of business funds for business activities. No different to using a cheque. If he was to start paying for personal activities then that would be different.Regards,
Burg0 -
Thank you0
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Hi,
I never can remember this.
If a director in a close company has a company bank account 'debit' card and uses the card to pay business expenses (no dispensation in place) do these transactions get reported in section 'C' or 'N' on the P11d, under other expenses or since they are general business expenses e.g. stationery, online company purchases etc. could they be ignored and not reported at all?
These purchases will for the company and you do not need to report them and could be ignored.What if he uses the debit card to pay his overnight accommodation for business travel?
Travel and subsistence have to be reported on P11D. Generally section "N".0 -
I think we may be missing one point here, if there is no dispensation in place then technically any payment made is treated as potentially taxable, but allowed on P11D. The director then needs to claim the deduction in his SA return.
For this he needs to have the receipts in order to prove that the sum was physically expended but if he has the receipts the company cannot use them to claim its deduction, or make any VAT reclaim, so it is a catch 22. This is why it is so important to obtain a dispensation.
HMRC are very reluctant to give a dispensation to owner managed companies but if pressed they will do so because the alternative, for them, is a whole lot of work in order to sor tout the mess it creates. Personally I would be very cautious about ignoring the payments made to him.
Payroll pro0 -
Hi Payroll,
I see what you mean, and I am in the process of obtaining a dispensation for this company as they are new to me. I was not aware that he actually had to have the source documents to make his SA claim. CPD
He uses the 'debit' card when he buys things for the company not for himself, for example business stationery in WH Smith where the card pays WH Smith directly. He does not pay WH Smith himself and then get a reimbursement. The payment goes directly from the company bank to WH Smith. He just does the shopping and picks up the stationery.
Would this need reporting or is it ignored as a general business expense.
However, with the hotel, he is the one staying at the hotel, on business purposes of course. and I would normally put this onto the P11d.0 -
If it's paid direct from the company then it's not a P11D entry as far as I am aware.
It's only if the employee pays personally and then gets reimbursed that it needs to go on.0 -
I feel the very act of purchasing the items and paying for them directly using the card creates a business transaction and as long as the receipts are in the books there is nothing else to do. There is a standard exemption for purchases of office supplies, page 10 of booklet 480 and S316 applies.
The discipline is to make sure he knows not to buy something for personal use and charge to the card because that is pecuniary liability and reportable, even if he pays it back.
I am not sure why you would want to put the hotel on P11D. If he is there on business and it is all legitimate then he is entitled to the fully matched deduction so an exemption from reporting automatically applies. I make sure that i book the hotel in my company name, get the invoices and accounts in the company name and then pay it. That way it is simple, VAT is recoverable without any questions and no P11D reporting.
Payrollpro0 -
payrollpro wrote: »I am not sure why you would want to put the hotel on P11D. If he is there on business and it is all legitimate then he is entitled to the fully matched deduction so an exemption from reporting automatically applies. I make sure that i book the hotel in my company name, get the invoices and accounts in the company name and then pay it. That way it is simple, VAT is recoverable without any questions and no P11D reporting.
Payrollpro
Even though the hotel is a 100% business expense the hotel is booked in the individuals name and paid for with the company card.0 -
Ah, not a good arrangement then! I can see your problem.
I still think it is not reportable, as you say it is a business function and it is only the circumstances which are unusual. Perhaps you need to suggest a minor change to the way he operates to improve his compliance. It is easy to get it in the company name and it makes VAT reclaims easier as well.
Payrollpro0
