Tax E-News – June 2024
Welcome to the June edition of Tax E-News. We hope that you find this informative. Please contact us if you wish to discuss any matters in more detail.
REPORT EMPLOYEE BENEFITS ON FORM P11D BY 6 JULY
P11d forms for reporting expenses and benefits in kind provided to employees and directors in 2023/24 need to be submitted by 6 July 2024. Note that paper forms are no longer acceptable; the return must be made online using PAYE Online for employers or commercial software.
Remember that reimbursed expenses no longer need to be reported where they are incurred wholly, exclusively and necessarily in the performance of the employee’s duties. Dispensations from reporting are no longer required, although HMRC would expect internal controls to be in place to ensure that the expenses qualify. […]
2023/24 EMPLOYMENT-RELATED SECURITIES RETURNS DUE BY 6 JULY
The deadline for reporting shares and securities and share options issued to employees for 2023/24 is 6 July 2024. This is the same as the deadline for reporting expenses and benefits provided to employees on form P11d for 2023/24.
Employers must submit their employment related securities annual returns online and attach the appropriate spreadsheet template if they have something to report. HMRC provide templates on their website that may be downloaded in order that the information may be entered and uploaded. […]
SHOULD EMPLOYEES REIMBURSE THEIR EMPLOYER FOR PRIVATE FUEL?
Where a company car is provided for use by an employee or director there is a benefit in kind taxable on the employee based on the original list price of the vehicle multiplied by the CO² emissions percentage for that vehicle. There is an additional benefit in kind where private fuel is paid for by the employer, which also needs to be reported on form P11d unless the employer has arranged with HMRC to deal with the tax on the benefits via monthly payroll. […]
HMRC OFFICIAL RATE OF INTEREST REMAINS AT 2.25%
HMRC have announced that the official rate of interest will remain at 2.25% for 2024/25, despite the Bank of England Base Rate currently standing at 5.25%. The official rate of interest is used to calculate the income tax charge on the benefit of employment related loans and the taxable benefit of some employment related living accommodation. […]
SHOULD DIRECTOR/SHAREHOLDERS TAX ADVANTAGE OF THIS LOWER RATE?
As mentioned above the HMRC rate of interest on beneficial loans looks very attractive compared to the Bank of England Base rate of 5.25%, and much higher rates charged by banks for unsecured loans.
Note that where loans are made to participators (broadly shareholders) of a close company there is potentially a special tax charge on the company on any loan still outstanding 9 months after the end of the accounting period. The charge is currently 33.75%, the same as the higher rate of tax on dividend income. This tax charge is only repaid to the company after the loan to the participator is repaid or written off. […]
ADVISORY FUEL RATE FOR COMPANY CARS
The table below sets out the HMRC advisory furl rates from 1 June 2024. These are the suggested reimbursement rates for employees’ private mileage using their company car.
Where the employer does not pay for any fuel for the company car these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee. […]
Input VAT
Within the 45p/25p payments the amounts in the above table represent the fuel element. The employer is able to reclaim 20/120 of the amount as input VAT provided the claim is supported by a VAT invoice from the filling station. For a 2500cc petrol-engine car, 4 pence per mile can be reclaimed as input VAT (24p x 1/6).