Salary calculation for mortgage.

Anonmagee

engineer_amy wrote: »

I would keep detailed expense reports with receipts attached every month, ensuring the amount that gets reimbursed matches the amount you have receipts for.

We keep every receipt we are reimbursed for. No receipt, no reimbursement. We have a copy of everyone as they all get emailed.

I wonder if perhaps a p11d is not required as the employer owns the property we live in. Owns the phone, cars etc etc

Could one argue that the "free accommodation" has no value, particularly if we are contractually required to live in it or any other property in order to carry out our job?

Thrugelmir

Anonmagee wrote: »

I wonder if perhaps a p11d is not required as the employer owns the property we live in. Owns the phone, cars etc etc

Just to make matters as clear as humanly possible.

Form P11D (Expenses and Benefits) is a tax form filed by United Kingdom employers for each director and for each employee earning over £8500 per year, and sent to the tax office with which their PAYE scheme is registered. P11Ds are used to report benefits provided and expense payments made to employees by employers that are not put through the payroll. The employees are also given a copy, should they need it for a self-assessment tax return.

There are currently 14 sections of the P11D:

A Assets Transferred
B Payments made on behalf of the employee
C Credit Cards and vouchers
D Living Accommodation
E Mileage Allowances
F Cars and car fuel
G Company Vans
H Beneficial Loans
I Medical Health
J Qualifying relocation expenses payments and benefits
K Services supplied
L Assets placed at the employee's disposal
M Other items (including subscriptions and professional fees)
N Expenses payments made to, or on behalf of, the employee

To calculate the amount that an employee will have to pay tax on, the employer has to calculate a cash equivalent of the provided benefit/expense. Most cash equivalents are straight forward being the amount the employer pays for the provision of a service less any amount the employee reimburses to their employer. However there are some quite complicated areas of UK benefits legislation that have to be interpreted to arrive at a cash equivalent e.g. Company cars, Beneficial loans etc.

Anonmagee

Thanks.

So basically I'll wait to the end of the tax year and see if I get a p11d sent through.

If I don't, my options are to stay quiet. Or rock the boat and give my boss potentially a substantial increase in tax bill for 18 housed employees.

I'm not suggesting they don't owe the money... Simply that I might not be the most popular guy in the firm. Perhaps instead of a Christmas bonus I'll get a sack of coal :-)

pinkteapot

Anonmagee wrote: »

If I don't, my options are to stay quiet. Or rock the boat and give my boss potentially a substantial increase in tax bill for 18 housed employees.

And yourself and all those other employees a pay cut when you start paying tax on the benefits you receive.

However, your boss may be covering things. At a company I used to work for, the company paid all our tax that would be due on benefits received (health insurance, etc). I didn't get a P11D because they explained that they paid it such that I had no taxable benefits. Not sure how they accounted for this and organised it, but they were a proper limited company in the financial sector in the city with many, many legal advisers and accountants, so they must have been doing it in a way that's allowed. You don't know all the exact workings of your boss' tax arrangements.

You're in a similar set-up to some people I know. They're house managers for a wealthy overseas person who owns a mansion in London. The owner of the house visits once or twice a year for a week. They live there, look after the house, clean, arrange necessary repairs, etc. They're paid a salary plus don't have to pay rent, bills, etc and have use of cars that are left on the grounds. I've never asked what their tax arrangements are. I thought it was best not to ask that question!

Anonmagee

pinkteapot wrote: »

You're in a similar set-up to some people I know. They're house managers for a wealthy overseas person who owns a mansion in London. The owner of the house visits once or twice a year for a week. They live there, look after the house, clean, arrange necessary repairs, etc. They're paid a salary plus don't have to pay rent, bills, etc and have use of cars that are left on the grounds. I've never asked what their tax arrangements are. I thought it was best not to ask that question!

Bingo. You should get a gold star for detective work. Or perhaps change your name to Hercule Poirot :T

My wife and I are potentially the people you know!

Anyway, I think I will wait for the end of the tax year and see if a p11d comes through. Then I will decide what to do from there. I probably come back here to talk through my options.

bclark

Anonmagee wrote: »

Thanks.

So basically I'll wait to the end of the tax year and see if I get a p11d sent through.

If I don't, my options are to stay quiet. Or rock the boat and give my boss potentially a substantial increase in tax bill for 18 housed employees.

I'm not suggesting they don't owe the money... Simply that I might not be the most popular guy in the firm. Perhaps instead of a Christmas bonus I'll get a sack of coal :-)

Don't forget that you are liable for the tax too so you will get a bill too.

star02

Not all accommodation is a taxable benefit if necessary for performance of role - ie caretaker of accomodation (outside normal hours)


http://www.hmrc.gov.uk/manuals/eimanual/EIM11342.htm

Anonmagee

star02 wrote: »

Not all accommodation is a taxable benefit if necessary for performance of role - ie caretaker of accomodation (outside normal hours)


http://www.hmrc.gov.uk/manuals/eimanual/EIM11342.htm

Ok this explains a lot then. Thank you!

My wife and I are contractually required to sleep in our staff accommodation which is 500m from the property we look after.(unless otherwise agreed) as 1 of us is on called 24/7.

Which brings me back to my original post/question...

How do I translate my "benefits" into a usable number when I approach a broker? Obviously my p60 doesn't give an accurate representation of my actual financial situation/income.

I also value my house at £1400pcm based on the fact that our neighbours property recently rented for that, and we have a marginally better house if I do say so myself.... Zoopla & Rightmove are wonderful things!