Director's Fuel card...P11D...Gross deduction...fixed contribution...pls help

knowledgeispowerknowledgeispower Just JoinedRegistered Users Posts: 22
Hi all, hope you cen help me please....

I've got a client who is a director in a large company and would like to add business mileage to his SA.
He's got a fuel card which he uses for both personal and business use, hence they deduct £70 from his GROSS salary every month to contribute to personal use. But his petrol use is on his P11D. Hope this makes sense.
He's got an excel sheet with business and personal mileage which is fine.
This is what his payroll dept said:
"Please note that the cost of your private fuel used in 2015/2016 has been included on your P11d.
The reason for this is that whilst you have had £70 per month deducted through payroll as a fixed contribution, this has been deducted from your gross salary rather than from net salary with the result that no tax has been deducted in the year from the private fuel used.
You should continue to make a claim for use of your private car for business purposes via the SA103 Tax Return in the normal manner."

payroll also said: Don’t forget to mention you get a £70 deduction for the private element

So...do I just enter P11d info in SA as it's given and add business mileage x 45p to his SA as an expense or do I need to do anything with his whole £70 reduction etc...???

many thanks in advance

V

Comments

  • mrme89mrme89 Registered Users Posts: 562
    edited January 12
    You say that the fuel is supplied for by the company for personal and business use.

    The .45 / .25 ppm rate incorporates a fuel element. If you were to continue with your proposal of claiming .45ppm in full with adjustment, you would be over-claiming, wouldn’t you?

    The calculation for the claim would be:-
    1. Add up total allowable business miles.
    2. Apply .45 / .25ppm
    3. Deduct business fuel paid for by the employer.


    The private use is irrelevant for the claim as it has already been deal with.
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderRegistered Users, Moderators Posts: 889
    edited January 12
    What is the amount on the P11D? Is it the total spent on fuel card?
  • mrme89mrme89 Registered Users Posts: 562
    It should be total less contribution.
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderRegistered Users, Moderators Posts: 889
    mrme89 said:

    It should be total less contribution.

    It's not clear though, it says "Please note that the cost of your private fuel used in 2015/2016 has been included on your P11d"
    mrme89
  • mrme89mrme89 Registered Users Posts: 562
    I agree. Which is why I said 'should'. I suspect the company have got it wrong. They've probably done class1a nic instead of class 1 too.

    That's here nor there for the income tax relief though.
  • knowledgeispowerknowledgeispower Just Joined Registered Users Posts: 22
    Thanks everyone.But I'm even more confused now :-)
    So basically he's got a card that he buys petrol with -business and personal- and they deduct £70 every month from his gross salary to contribute towards personal usage. The amount on the P11D is £1592. His business mileage is 1275...

  • mrme89mrme89 Registered Users Posts: 562
    edited January 12
    If we assume that £70pm covers all personal fuel, and we have £1592 that covers all fuel consumed.

    So we have £840 personal fuel and £752 business fuel.

    So then we have 1275 @ 45ppm = £573.45

    So the fuel paid for by the employer (£752) to cover the business miles exceeds the amount claimable.

    Either some figures are missing, or my assumptions are well off.

    I've had a beer or 10, so I expect MarieNoelle to rip my post to shreds.
    MarieNoelle
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderRegistered Users, Moderators Posts: 889
    edited January 12
    My assumption is that i don't think the £70 covers all personal fuel, so the employee needs to deduct mileage (573) and the salary deductions (840) leaving the difference of £179 as the taxable amount. Whether this is the correct way to deal with it for NIC is a different matter.

    Edit I am now wondering whether the 840 being the gross amount we need to apply the marginal rate of the taxpayer to find the net amount? Maybe I also need a glass or 10 at this time of night. It's been a long day.
  • mrme89mrme89 Registered Users Posts: 562
    With a slightly sore head, I return.

    In order to answer the question accurately we need:-
    Business mileage (x)
    Person fuel contribution (y)
    Business fuel contribution (z)

    The calculation we need is (X * 0.45ppm) – Z

    We are told that the P11D value is £1592. The P11D value should be for all fuel. We can only assume the employer has done everything correctly.

    We are also told that the employee pays £70pm for private fuel – and without any other information (the OP needs to obtain further info) we can only assume that £70pm covers all personal mileage.

    So £1592 – (£70pm * 12 months) = £840. Therefore Y = 840. If Y = £840, Z must be £752

    We are told that the business mileage (x) is 1592 miles.

    So I think we can do the calculation…

    1275 * 0.45 = £573.75

    £573.75 - £752 = (£178.25).

    So the employee has been reimbursed over the exempt allowable amounts by the employer. So £178.25 should have been put through payroll and taxed and NIC’d.


    The disclaimer here is that we have had to make some assumptions.
  • BeccaLouJ9BeccaLouJ9 Experienced Mentor DevonRegistered Users Posts: 961
    Oh my, how can your brain still be working like this in January, when it doesn't have to!!
    :)
    Becca Jones CTA MAAT ATT :)
    mrme89
  • BeccaLouJ9BeccaLouJ9 Experienced Mentor DevonRegistered Users Posts: 961
    ... and drinking on a school night? Tut tut! :)
    B x
    Becca Jones CTA MAAT ATT :)
    mrme89MarieNoelle
  • mrme89mrme89 Registered Users Posts: 562
    I had worked 16 hours straight to get the management accounts pack done so I deserved it! Today isnt a school day this week, so it was alright :)
  • BeccaLouJ9BeccaLouJ9 Experienced Mentor DevonRegistered Users Posts: 961
    I'll let you off then

    B x
    Becca Jones CTA MAAT ATT :)
    mrme89
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderRegistered Users, Moderators Posts: 889
    I think we get to the same results as the taxable amount is 179 (rounding). Agree this should have had NIC applied.

    Have a good weekend everyone!
    BeccaLouJ9
  • knowledgeispowerknowledgeispower Just Joined Registered Users Posts: 22
    Thank you mrme89 - hope you head is better? and thanks MarieNoelle
    so just to confirm instead of him adding more expense to his SA, do i need to add this as more income? eventhou it is taxed on his P11D?
    Does his personal milaege makes any difference as I got hold of it, it's 7786...
    And what is the £70 deduction on his private element - what his payroll dept mentioned?

    thanks again

    V
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