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Mileage allowance and use of home on P11d

AMS_AccountantsAMS_Accountants Hull, East YorkshireRegistered Posts: 31
Hi

I have just had a new client handover (sole director) and his previous accountant has provided a P11d for the 2015/16 tax year. They have put his mileage allowance and use of home in Section N and I am wondering if that is meaning that the client will have to pay tax on these?

Haven't done a P11d in a long time.

Thanks
Carl Derving FMAAT | Managing Director
AMS Accountants
www.ams4u.co.uk | 01482 257752

Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,432
    Entries in box N relate to reimbursement of expenses made to the employee ( in the absence of dispensation). The amount is taxable as income but no class 1A (employer) are due.
    However I wouldn't expect mileage within the exempt limits to show on this. Excess mileage above the approved rates must be entered in box E.
    These amounts should be entered as taxable income of employment on the individual's tax return but a corresponding claim should be made for expenses of employment if they are wholly, exclusively and necessarily incurred for the employment. The effect is no extra tax is due on them.

    When the P11D is filed it normally triggers a new tax code for the employee so you would need to write to HMRC to have this adjusted claiming the amount is fully within section 336.

    From 2016-17 expenses reimbursement will not need to be declared on P11D anymore.

    MN
  • AMS_AccountantsAMS_Accountants Hull, East YorkshireRegistered Posts: 31
    So use of home allowance paid by the company as liable for the employee to pay personal tax on?

    Is there a limit on what an employee can receive in mileage even if they are paid the 45p and 25p rates?

    If meals are paid for by the company, are these also taxable to the employee?
    Carl Derving FMAAT | Managing Director
    AMS Accountants
    www.ams4u.co.uk | 01482 257752
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,432

    So use of home allowance paid by the company as liable for the employee to pay personal tax on?

    Reimbursed expenses are income of employment but also expenses of employment. So they net each other out. But the taxpayer has to claim the expense on his return.

    Is there a limit on what an employee can receive in mileage even if they are paid the 45p and 25p rates?

    No if they are all business mileage. There is an excess only if the company reimburse at a higher rate than HMRC approved rates.

    If meals are paid for by the company, are these also taxable to the employee?
    All expenses relating to the employee, however paid (directly or reimbursed) should normally go on the P11D.

  • AMS_AccountantsAMS_Accountants Hull, East YorkshireRegistered Posts: 31
    Hence why people don't bother putting them on a P11d because it is just a paper exercise with no additional tax being paid out?
    Carl Derving FMAAT | Managing Director
    AMS Accountants
    www.ams4u.co.uk | 01482 257752
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