Tax Disputes & Investigations

Benefits-in-Kind and Expense Payments

For all businesses, correctly reporting expenses and benefits-in-kind can be a real headache. What counts as a benefit and what doesn't? Why do we need to report all business expenses? What can be paid or provided to staff tax-free? The rules are often lengthy and complicated and the costs of getting it wrong can be significant.

Common benefits-in-kind include: -

• company cars and/or fuel;
• loans to employees;
• living accommodation; and
• private medical cover.

Very often businesses are required to maintain detailed records simply to avoid possible claims that tax is due (e.g. pool vehicles and purchases of fuel).

All businesses must file an annual P11D Return (including a declaration if no benefits-in kind were provided). HM Revenue & Customs (HMRC) charges penalties for failing to submit a P11D as well as the submission of incomplete or incorrect returns. Omitted benefits-in-kind are the most common type of failure discovered by HMRC during an Employer Compliance Review.

Many employees, particularly Directors and senior personnel, incur business expenses as part of doing their job. To claim tax relief, these have to be reported to HMRC. This exercise is often laborious and prone to mistakes, but failing to do so can result in an unexpected demand for tax plus interest and penalties. Directors expenses' and/or associated expenditure (such as using a business credit card or charging personal expenses to the company) are sometimes only reviewed when the business accounts are being prepared – this is often too late for the P11D Returns.

How can OneE TDI help?

At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations work. We offer confidential, non-judgemental advice to best defend our clients and have a proven track record in successfully managing all contentious tax matters. We have successfully defended numerous businesses challenged by HMRC in relation to benefits-in-kind and expense payments and ensured that any enquiry or dispute with HMRC was resolved quickly, fairly and with little disruption to the business itself. We provide a comprehensive service to accountancy and legal practitioners and their clients. Our advice saves our clients time and money and helps reduce their potential exposure to tax, interest and penalties.

We regularly advises businesses on benefits-in-kind and expense payments to ensure that they control administration time/costs and minimise the tax due. We help introduce expense policies and approved expense rates and negotiate and agree individual dispensations with HMRC. These can eliminate most reporting requirements – which saves time and costs and also helps manage the potential risk of errors that could otherwise lead to a financial penalty. Dispensations can be obtained even for Directors of small companies when proper checking, monitoring and recording systems are in place. If tax has to be paid, we provide solutions such as PAYE Settlement Agreements (PSAs). These help ensure that employees don't receive an unwelcome tax bill on those 'little extras' that businesses provide to help motivate, thank and retain staff. Any exemptions and/or allowances are fully utilised to maximise the potential tax savings available.

Putting it simply, we take control of and manage all issues relating to benefits-in-kind and expense payments so you can get on with your life and your business. What price peace of mind?

Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.

How can I contact OneE TDI?

If you would like a free, no obligation discussion with us, please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.

Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.

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