Van benefit backdated
Cruella55
Posts: 4 Newbie
in Cutting tax
I need help please. My son's firm gave him a van on 14th September, it was brand new registered on 1st September. But the tax office are saying that he has to pay van benefit dating right back to last April as that is when the tax year began. But this van didn't even exist in April! So they want over £500 from him when he was told he would just pay £73 a month tax on it. Is this right? Can anyone help me please, I can't make head or tail of the HMRC website.
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Comments
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What is his tax code and how much is the restriction in his tax code. Is it being operated on a week/month 1 basis?0
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He's been put on a K42 tax code. I don't know about the week 1 / month 1 bit, is that for new employees? He's been in the job for 18 months. It was 1165L before all this.0
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I need help please. My son's firm gave him a van on 14th September, it was brand new registered on 1st September. But the tax office are saying that he has to pay van benefit dating right back to last April as that is when the tax year began. But this van didn't even exist in April! So they want over £500 from him when he was told he would just pay £73 a month tax on it. Is this right? Can anyone help me please, I can't make head or tail of the HMRC website.
a) Who told him he would pay £73 a month?
b) How has the £500 been asked for?
c) How is his code number calculated ? He should have received a form P2 from HMRC showing how the code number is calculated.
. A normal code number recalculates tax due back to April. When a code is reduced that would mean all unpaid tax back to April would be deducted. By operating the code number on a week1 or month 1 basis means that tax due from now on will be calculated on a weekly/monthly basis to avoid this.0 -
His firm told him he would pay £73 a month van benefit, this is what they all pay and that's fine, he expected that. But they have put him on this new code (K42 W1 M1) and taken £139.20. He hasn't received the form P2. He phoned the tax office and they told him he has to pay the back tax right to April, even though he only got the van in September and he won't get a refund next April for the difference, that's just how they work. But surely he doesn't have to pay tax on a van he didn't have? He's now going to struggle to pay his rent let alone any Christmas presents. We're at our wits end.0
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Without seeing the breakdown of the code it's hard to say - can he log on to his personal tax account at gov.uk and find out?
Does he also get private fuel? The code seems low just for van benefit which should be £3350 per annum?
With regards the start date, HMRC will base this on what employer has told them.0 -
Firstly don't put to much faith in the payroll/HR department. They are not tax experts and will only be aware of very basic situations.
It may be that had he had the van for a full year and the correct tax code was in place from day 1 it would cost £73/month but that isn't your son's situation.
He does have to pay tax for the whole year on the Van benefit. But the benefit value should reflect the period he has the van. So if it was available from 01:09:2018 - 05:04:2019 and a full years benefit is £3,350 then his tax code should include van benefit of approx £2,000 not £3,350.
You would really help everyone if you provided the breakdown of his tax code as the K42 means nothing, there could literally be a billion ways of arriving at that.
It should consist of something like,
Personal Allowance
Less
Van Benefit
Less
Van Fuel Benefit (maybe?)
Less
In year adjustment (to collect the tax owed from April to when the tax code was issued)
We need the full breakdown with amounts.
As BoGoF states K42 does seem low but there may be a valid reason for this.
It is quite amazing how often people omit to mention quite important information from tax queries on here.0
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