P800 - Underpayment of tax due to benefits in kind

RichCH

Hi all,

So this year for the first time ever I was sent a letter by HMRC saying I had underpaid on my tax by £347.40 because of £1,867 worth of benefits in kind. I spoke to my employer's book keeper about this and he said to me that taxis that had been provided for me, hotel rooms and flights (regardless of if I paid for them personally and was reimbursed or if they were paid for directly by the company) have to be declared and then these class as benefits in kind to me. Then I get taxed on these and then I have to reclaim it.

I looked on HMRC website and it says transport laid on for me to not my normal place of work, or transport that I pay for and then get reimbursed for (trains/flights) are not taxable.

I'm trying to work out if my book keeper is talking rubbish or if in fact this is what I have to do. Seems crazy to me that if I have to go abroad for work and they buy me a flight and a hotel, then I get taxed for it and I have to claim it back later.

Mikeyorks

The 'first time ever' is not surprising - as it's the first time HMRC have issued these reconciliations en masse.

If you have taxable benefits in kind your employer needs to create a P11D with the detail on .... send it to HMRC by the 6th July following the end of the tax year - and give you a copy. So you should have the detail?

CLAPTON

were these taxi, flights, hotel for business purposes or for your private use?
if they were for your private use then they are benefits in kind; if they were for business purposes then there should tax free.

RichCH

They were all for business, be it going to meetings, getting to the airport, going to another country for work... the list goes on.

Yes, I got the P11D form from work, they have given me one every year but I've never had a letter from HMRC before telling me that I need to pay tax on them.

After a bit of digging and spending 20 minutes on the phone, apparently I need to write to my tax office (different for everyone) and get them to issue me with a Section 336 form which I can reclaim that money from them because it is all for business purposes.

Mikeyorks

RichCH wrote: »

Yes, I got the P11D form from work, they have given me one every year but I've never had a letter from HMRC before telling me that I need to pay tax on them..

But you will have had a P2 (Coding Notice) presumably? And which should have coded out the benefit value ... in order you pay tax on it during the year. Normally the benefit is coded out virtually a year in arrears

The P800 isn't telling you any different. It's a 'reconciliation' statement. But I think HMRC are putting the benefit into the strict year it applies to .... therefore it appears as an underpayment. But they will be coding it out (as before) so the reality is nothing changes. It's a bit like paying your gas / elec by Direct Debit. It's virtually certain a quarterly statement at the end of the winter period will show arrears. But if your useage is historically consistent .... nothing is different and the DD should continue as prior.

After a bit of digging and spending 20 minutes on the phone, apparently I need to write to my tax office (different for everyone) and get them to issue me with a Section 336 form which I can reclaim that money from them because it is all for business purposes

But that's slightly different. Section 336 typically applies to entertainment expenses. Which does not appear to be what you were talking about originally? Not an area I will venture into .... but there's a recent thread here :

https://forums.moneysavingexpert.com/discussion/2964486

RichCH

Very strange then, when speaking to the guys at HMRC they said to me that I should complete a Section 336... which after looking at the link in the previous post, doesn't make any sense as they are not related to entrainment expenses.

I was also informed via the HMRC website that I should complete a P87 form to declare expenses, but these were only for ones that I had paid for myself and then reclaimed which I only have a few.

jennifernil

This sounds like madness to me.

Your employer should have arranged a "dispensation" so that you can be reimbursed legitimate business expenses without them being taxed.

They could pay these to you against receipts submitted without taxing you, and they would not need to be shown on a P11D. Or pay airlines/hotels directly.