Problems with HMRC

[Monkey]

I was wondering if anybody on PAYE but required to fill in a self assessment form has had issues with HMRC when it comes to the treatment of taxable benefits.

Basically all my work benefits are payrolled so included in my gross pay on which tax is calculated. Yet HMRC insists on adding the value of these benefits again to my gross pay, meaning i?m paying tax on my benefits twice.

I?ve put in an official complaint but was wondering if anybody had had the same issue.

Sorry to be boring.

[Penguin68]

I would imagine that the process of declaring them yourself has led to this double counting. Your payroll should be issuing a P11D - separate from your P60 - which identifies taxable 'perks'. You then declare your taxable earnings and then your P11D statement - together with the tax deducted. That way you get taxed at the right level. If they won't do that you should deduct your perks from your taxable pay, and then declare your earnings under pay and your perks and show the tax you have paid. HMRC will then calculate that you have no tax owing (as regards these items). As it stands HMRC has no way of knowing that your taxable pay includes taxable perks, particularly if you then additionally declare them. You are having to make an alteration to the P60 because your employer isn't completing a P11D. It may be helpful to tax you up front for taxable benefits - but not if you end up paying twice. Talk to your employer's payroll people about what you should do. Get them to give you a memo of taxable benefits included in your P60.

[PeckhamRy]

Hi there, when it comes to employment income HMRC follow a formulaic approach:

Form P60 income + Form P11D benefits + tips (if any) = taxable employment income

If your taxable benefits truly have been 'payrolled' (and therefore included in your P60 figure) then this should have been reflected on your form P11D (shown as an amount 'made good' or already taxed), or in some cases I know that employers simply won't produce a P11D at all (although strictly they should for Class 1A national insurance). This would prevent you from declaring the same income twice - since your P11D benefits would say zero.

Without knowing all the details it's hard to say obviously, but if HMRC are insisting that they need to include the P11D benefits figures in your taxable income, then I can only imagine that it's because your P11D benefits are not showing as zero. Which suggests that either a) your employer has made an error in producing your P11D or b) the benefits aren't taxed via payroll in the way that you think (in my experience, HR departments can struggle to articulate and explain how this works).

So it may be worth following up with your employer and questioning how they've calculated the numbers on your P11D. Unfortunately you're unlikely to get anywhere arguing with HMRC that they shouldn't include the P11D benefits figures - as far as they are concerned, if it's on the P11D, then they'll include it and tax it.

Hope that helps

P.S. as I've just seen Penguin68's response - I would caution against manually adjusting your own P60 figure, as this is a sure fire way to set alarms off when you submit your self assessment return

[Monkey]

Thank you, Penguin.

My employer has been very unhelpful - doesn?t provide a P11D form and is refusing to put anything in writing. I?m going to take this up straight to the head of HR this time.

I never dared to amend my gross pay details as it?s the official number appearing on my P60 so thought this would cause no end of problems.

I did contact my husband?s accountant who was most unhelpful.

Is there written guidance on this? I can?t find anything anywhere.

Thank you so much.

[Monkey]

And thank you, PeckhamRy. I don?t get a P11D form unfortunately.

[PeckhamRy]

I see, which does make sense if they've payrolled them (notwithstanding the Class 1A NICs, but this is their issue, not yours - it doesn't have an impact on your tax return).

But this begs the question, why are HMRC insisting on including additional income if there's no P11D? And how are they calculating the value of these benefits? In the absence of a P11D HMRC should accept that you have no taxable benefits to report

[Monkey]

I recalculated my gross pay manually today and can confirm that my gross pay includes earnings and benefits. I also recalculated the tax on my gross pay and it looks right.

[Monkey]

I think hmrc are giving me their default, stock answer and not trying to understand my issue. I?m starting to think that they never amended the self assessment form to take into account the fact that some companies now payroll benefits... I?m basically caught between an incompetent hr department and incompetent hmrc.

[Monkey]

Hmrc are using figures I gave them based on the taxable benefits listed on my payslips for the relevant tax year.

[DaveR]

Employers have to register with HMRC to put benefits through payroll - if not they have to issue a P11D

If registered your tax code is amended to take account of the benefits and tax paid.

https://www.gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll

[Penguin68]

I would caution against manually adjusting your own P60 figure, as this is a sure fire way to set alarms off when you submit your self assessment return

Accepted - but there is a facility on the forms to add notes - where you do make adjustments to formal forms for clarification, annotating those changes is acceptable, particularly where there is existing correspondence.

I would check with your firm if they have made the arrangement noted by DaveR - if they haven't then amending and noting may be the best option. But DON'T put your firm's P60 information in unchanged and then additionally report your taxable benefits. You will definitely be double taxed then.

[Mick Mac]

Monkey Wrote:

-------------------------------------------------------

> Hmrc are using figures I gave them based on the

> taxable benefits listed on my payslips for the

> relevant tax year.

If the benefits have been taxed fully through PAYE, as you say, and therefore included in the P60 gross pay, and no P11d issued then you shouldn't be repeating them anywhere on the self assessment tax return, or you will be double reporting as its already included in gross pay number.

If you and your employer are definitely on the system that DaveR highlights above, than you can ask your employer for the following information:

"You can give this information on your employees? payslips or in a separate note or statement. It should be clear to the employees:

?what benefits have been subject to PAYE tax

?how much of the value of each benefit you?ve collected and reported tax on

If your employees fill in a Self Assessment tax return they?ll need this information so they can tell HMRC."

Once you have this statement you should be able to forward to HMRC to resolve the situation. In summary, your employer should be helping you more with this.

[Monkey]

Thank you, all.