The joys of expense reporting
Monday morning – mental note to self – apply for a dispensation from HMRC for expense reporting.
6 July is fast approaching and the annual task of preparing P11D’s is upon us once again. Every year this circular paperchase between employer, HMRC and employee mystifies most of the MD’s with whom I work – reporting items where no benefit has arisen to the employee, who may even have paid the expenses on a company credit card, just so that he or she can include them on his tax return and claim a deduction so as not to suffer a tax charge.
Fair enough for benefits, although the Class 1A NIC payment in July is still a shock to some, but surely it’s time we reviewed the need to report expenses reimbursed at cost. And when was the threshold of “employees earning £8,500 or over” last revised?
So, whilst checking through the forms for this year it’s onto the HMRC website to download P11DX and submit that with the forms – then this time next year we can be focussing on the business.
Also time to make sure that we are prepared for online filing; businesses with more than 50 employees are already required to file year end PAYE returns online, and next year also P45/P46; smaller businesses will need to be ready to do this for year end returns in 2010.
Do it earlier and HMRC pay you a small (tax-free) incentive. So, mental note 2: make sure we’re talking to our payroll providers to ensure that we are in a position to comply, and consider filing online this year too.
