Company trying to screw us on P11D?

Dabooka

Hi there, hope you can help me on a query.

I'm not tax minded AT ALL; I've always been PAYE since I started work, but my other half (who this question is about) is more knowledgeable.

Basically, she works for a small national outfit which pays a monthly salary and provides a company car. The deal on the car has always been that she uses a fuel card for all her fuel purchases, and submits a monthly breakdown of the miles. The proportion of fuel used for personal miles is then deducted from her pay the following month.

However, today she's received a breakdown from her company detailing the expenditure on the car (P11D?), and asking for her share of back. That's the road fund, insurance, maintenance, everything, even car washes.

Is this normal? She's hitting the roof trying to get some answers, I'm a bit clueless and can't be much help to her. She's been at the company a few years now and never received one before.

Any further information need, please just ask, and any help you can offer is greatly appreciated.

Cheers,

Dabooka

mrcow

So they are asking for her share of the "wear and tear" of a company car? Seems a little odd.

What does her car agreement say? Did she sign up to agree to pay this when she agreed to take the car? She needs to check what she's agreed to.

NJW69

Generally the P11D is for the tax office so that they can see if any tax is due.

Dabooka

mrcow wrote: »

So they are asking for her share of the "wear and tear" of a company car? Seems a little odd.

What does her car agreement say? Did she sign up to agree to pay this when she agreed to take the car? She needs to check what she's agreed to.

That's what I thought. I can't believe we're expected to "contribute" to a depreciating company asset (it's well over 3 years ols as well). She was asked to sign something regarding the car last year, I'll ask her to dig it out. I think it was something regarding the car benefit as a loan or something. There was certainly no mention of this, she would never have agreed to it.

I can say with some certainty that there will be no agreement to contribute to this, the company are little "slapdash" on matters HR / Payroll so if anything things are omitted or forgotten.

Thanks for your input so far

Dabooka

NJW69 wrote: »

Generally the P11D is for the tax office so that they can see if any tax is due.

Well I know the missus got it through / was expecting it, and knew it was coming and what it does. It was however referenced in the company email regarding the "bill"

Cheers for your help.

Dabooka

mrcow wrote: »

What does her car agreement say? Did she sign up to agree to pay this when she agreed to take the car? She needs to check what she's agreed to.

Apparently they agreed to pay the maintenance. She's trying to dig it out to double check (she's observing this from work!).

terryw

There is an HMRC "Benefit in Kind" in having personal use of a company car and the P11d is to ensure that this taxed correctly. HMRC have become more proactive about this over the years and I am not completely up to date. But using the search facility in the HMRC site you should be able to establish the current position.

It is not just a simple matter of the employer and employee having an agreement about this.

Dabooka

I've had a quick butchers on this and found the section relating to fuel (basically if it's paid as you go, then it's all good) but can't see anything about wear and tear contributions etc.

I cna't believe this, we're off on our honeymmon in a fortnight and have better things to do with the thick end of a grand!

mrcow

Well the car itself is a benefit in kind as she is allowed to use it for personal use so it will be on her P11D. The way they work out the figure on her P11D is here:

http://www.hmrc.gov.uk/calcs/cars.htm

Whatever that figure is, she will need to pay tax on it. As she's paying for her own fuel as she goes along, then the fuel side of it is taken care of already.

I've never heard of someone being charged for car washes or insurance etc. Have they presented her with an invoice for all of this then? If they have, then it's hardly a "benefit" is it? She's already paying for the benefit of having a car in terms of her extra tax that she's paying for the company to then invoice her is ridiculous.

Someone in her HR department is seriously muddled.

Dabooka

mrcow wrote: »

Well the car itself is a benefit in kind as she is allowed to use it for personal use so it will be on her P11D. The way they work out the figure on her P11D is here:

http://www.hmrc.gov.uk/calcs/cars.htm

Whatever that figure is, she will need to pay tax on it. As she's paying for her own fuel as she goes along, then the fuel side of it is taken care of already.

I've never heard of someone being charged for car washes or insurance etc. Have they presented her with an invoice for all of this then? If they have, then it's hardly a "benefit" is it? She's already paying for the benefit of having a car in terms of her extra tax that she's paying for the company to then invoice her is ridiculous.

Someone in her HR department is seriously muddled.

Thanks for that; it's nice to know we're not the only ones who find this all a bit odd. As for the HR Dept, no Department as such, just a bod I believe. What is odd is she still has a montly deduction against the car other than the fuel. I'll probably find out more when I get home.

Thanks for your help and views, I'll keep you posted

TM1976

First of all best to check with HR, but I suspect the reason for this is as follows:

If your company pays your fuel and you make a contribution towards it, your contribution doesn't reduce the benefit in kind you are taxed on. Say the fuel BIK is £5,000 a year and the contribution your wife makes is £2,000 she will still be taxed on benefit of £5,000.

If the contribution is made towards the capital cost of the car then this BIK can be reduced. So if the car BIK is £5,000 and she pays £2,000 she will only be taxed on £3,000 - so she'll pay less tax.

I suspect this is the kind of thing the company is trying to effect by demonstrating that the petrol contribution your wife makes is a capital contribution based on a per mile calculation of vehicle wear and tear etc. From your wife's point of view it's better off tax wise to deal with it like this - the bill you get is probably so they can demonstrate to the taxman she is contributing towards the car and not the fuel cost.