First year of benefit in kind, need to disclose now or can wait for P11D?

jamesd

I'm in the first full tax year of a scheme where benefit in kind payments and P11D will be required, replacing a scheme with a dispensation. Am I required to estimate the BIK for this tax year and tell HMRC within the year to get a change to my tax code or can I wait until next tax year after the first significant P11D is produced? Benefits decisions take effect on 1 January each year so an estimate is the best I could do if I tried it. I'm not currently routinely required to file tax returns, no routine SA things.

The last tax year had around £20 of BIK due to a few days of transition near the start of the tax year. HMRC just made a tiny change to my tax code to cover that. This year will be a few thousand Pounds.

If I have the choice I'll choose to take the income now and have a lower tax code next tax year.

ceeforcat

What kind of benefits are we talking about that runs to 20K?

In any case you are indeed wise to be thinking about this. If you have received 20K benefits in this TAX year this is required to be submitted on form P11D by your employer by 6th July 2012. By that time, the tax year will be long gone and you will be underpaid considerably. HMRC may not get round to adjusting your code until this time next year and that could add another half year underpayment!

BoGoF

Should also remember that if the 2011-12 underpayment is more than £3000 you will not be able to be collected via your tax code, you will need to make a lump sum payment.

jennifernil

I read it as £20, not £20k. And this year a few thousamd K.

jimmo

jamesd wrote: »

Am I required to estimate the BIK for this tax year and tell HMRC within the year to get a change to my tax code or can I wait until next tax year after the first significant P11D is produced?

Basically its up to you whether you approach HMRC to get your Code corrected now or not.
Some people worry about underpayments building up. Others regard them as interest free loans especially where the underpayment will be collected by way of a coding adjustment in future years.
If an employee is given a company car the employer is required to submit a P46 (car) so that HMRC can make coding adjustments.
http://www.hmrc.gov.uk/paye/exb/overview/P46car.htm
Other benefits only go on forms P11D so, in your case, HMRC are unlikely to be aware of the amount of your current benefits.

jimmo

BoGoF wrote: »

Should also remember that if the 2011-12 underpayment is more than £3000 you will not be able to be collected via your tax code, you will need to make a lump sum payment.

I thought it was £2,000.
http://www.hmrc.gov.uk/manuals/pommanual/PAYE90025.htm

jamesd

Thanks. No car involved in this case. I take the loan view.

No k in those numbers. jennifernil is right.

BoGoF

jimmo wrote: »

I thought it was £2,000.
http://www.hmrc.gov.uk/manuals/pommanual/PAYE90025.htm

It's increasing to £3000 for underpayments for 2011-12 onwards