Tax on Expenses and Benefits - Self Assessment

philipk79

I am employed full time, earning a salary on PAYE
I travel constantly for work, and incur expenses for travel, flights, personal car, hotel, subsistence etc etc
I have been asked to complete a self assessment tax return due to the volume of my expenses.
I pay my expenses myself, document my reciepts, and my employer then pays this into my bank account - seperate from my salary.
My expenses are then listed on my P11D:
Travelling and subsistence = £10,000; Entertainment = £200; Other Expenses [Fuel/Parking] = £3000
My P11D also documents my medical insurance = £1000
When I enter the details into the SA form, it calculates my total income as my salary + my expenses - and indicates my tax liability for the sum.
This does not seem correct that I am paying tax for the need to work. Am I missing something. If I traveled more than I currently do, it would be possible for the tax liability to exceed my net income
Any help would be greatly appreciated!

fengirl_2

You simply need to enter the reimbursed expenses in the expenses claim section of the employment pages. In this way you will only pay tax on your medical insurance.

bootman

P11d normally would have the healthcare, company car, only the fuel if you have a fuel card as these are a benefits in kind and liable for tax.

The rest surely are out of pocket expenses being reimbursed to you and should not be on the P11d.

I am sure one of the tax people experts will be along to help you out soon.

philipk79

Fengirl - Thanks for your response. In the employment section I cannot find a field for reimbursed expenses, there are fields for:
Company Cars and Vans: £0
Fuel for Company Cars and Vans: £0
Private Medical & Dental Insurance: £1000
Vouchers, credit cards & excess mileage allowance: £0
Good ands other assets provided by employer: £0
Accomodation provided by employer:£0
Other benefits: £0
Expenses payments received and balancing charges: £13200

The amounts indicate how I have filled it out with the info from my P11D. From what I could work out all of the categories I mentioned in my original post get grouped there (Hotel, Flights, Subsistence and Fuel/Parking (from fuel card for personal car but business miles))

I have phoned the SA helpline and they inform me that it is a benefit, and so therefore is taxable - more logical advice I have received is that because I get back only the amount I have paid, then it should not be taxable.

mrsmyagi

Hey there, you just need to enter the expenses you've incurred into boxes 17 - 20 on the employment pages. If you do this then it will knock them off your earnings effectively cancelling out the expenses you've received, so you don't pay tax on them. It would only be a benefit if they reimbursed you more than you'd spent.

philipk79

Thanks for the responses - this information enabled me to argue with HMRC, and we found that the page with boxes 17-20 wasn't displaying. Seem to be getting closer now! Thanks again

ceeforcat

I have a big problem with this - all of the amounts are 'round sums' - £10000 for travelling and subsistence and £3000 for fuel and parking - the HMRC will class these as round sum allowances which are both taxable and NIC able(?) I also do not like the fact that you have been asked to complete a Self Assessment return - sounds like a potential enquiry to me with any repercussions for your employer, not you so much.

Do not want to alarm you but the warning signs are there. Hopefull some of the other tax people on here will provide their thoughts on this.

fengirl_2

I agree with ceeforcat -I assumed the round sums in your question were just examples! Normally, an employer would apply for a dispensation to enable him not to complete a P11d if the expenses were pure, properly receipted reimbursements of work expenses.