 July
2007
P11D Deadline Looming
The forms P11D, which report employees and directors
benefits in kind and expenses for the year ended 5
April 2007 are due for submission to HMRC by 6 July
2007. The process of tracking down the information
can take some time so don’t leave things until
the last minute.
Some things to be aware of:
Company cars
The benefit is based on a percentage of the list price
plus accessories – not what the business paid
for the car. The percentage is linked to the CO2 emissions
of the car.
Provision of fuel
Employees provided with free fuel for private as well
as business motoring will be assessed on a further
benefit calculated as a percentage linked to the CO2
emissions of the car and a set figure of £14,400.
This is a good time to check whether or not the individual
would be better off paying for their own private fuel.
Don’t forget that the employer also pays 12.8%
employer only Class 1A NIC on the value of broadly
all benefits in kind so there is a saving for the business
as well.
Vans
In 2005/06 HMRC changed the rules on the provision
of vans and where the private use of a van is restricted
to ordinary commuting (for example, restricting personal
use to just home to work travel) then the benefit in
kind scale charge of £500 (for 2006/07) can be
avoided.
In order for the benefit in kind to be avoided employers
should have amended employees’ contracts and
staff handbooks to reflect the change. Employers should
also be able to prove that they have enforced the restricted
private use policy.
The £500 benefit has increased six fold to £3,000
from 6 April 2007 so it may be time to confirm whether
employees understand the implication of the increased
benefit charge on them personally. For a basic rate
tax payer the increased tax charge on the provision
of the van is £660 as opposed to £110 for
last year.
It is not possible to change your van policy now and
back date it to the beginning of the tax year but changes
can be put in place part way through the tax year.
If you would like any help with the completion of
the forms P11D please get in touch.
Internet link:
HMRC article |
