Q. I have a simple small Limited company, and I am the sole Director. I take salary to NI Threshold, and the rest in dividends. Could you please advise on the current expenses situation, and what I should be doing regards P11D etc. I am completely confused!!
Every couple of months I reimburse myself from my business account in to my personal account for expenses incurred as below…
- Travelling Expenses to one of my clients to which I travel 2 to 3 times a week by train/bus
- Maybe a cup of coffee at the station each time
- Some odd bits of stationery/postage
- The odd snack/drink to meet prospective clients
- A small amount of mileage to travel to other clients
- Eye Test
- Nominal amount for home office etc
The following are paid directly from my business account…
- Mobile Phone
- Directors Income Protection
- Directors Personal Pension Contributions.
Any advice on this would be greatly appreciated.
A. All the expenses you have listed that are reimbursable to yourself are allowable for corporation tax purposes along with the mobile phone and directors personal pension contributions. These aren’t required to be included within a P11d and will not be subject to further tax implications.
The Directors Income Protection will be included within a P11d as a benefit in kind and subject to the rate of income tax threshold you personally fall in to. If you are a lower rate tax payer during the tax year this would be subject to 20% tax, and if you were within the higher rate tax threshold you would be subject to 40% tax. Your company will also be liable to 13.8% employers national insurance charge for the benefit distributed to the employee.
I hope this helps to clarify your queries.
I also claim for a dedicated home-office as we have a room that is used only as an office to run the business. My address is also the registered office of the Ltd. Co. Fully equiped with a fax, PC, desk and printers etc. As this room represents 1/5th of the available living space I calim 1/5th of utilities and Council tax on a monthly basis.
Surely the income protection only needs to go on the P11d if the benefit is paid directly to the individual. If the policy is in the company name and the benefit is paid to the company, it doesn’t need to appear on the P11d does it?