How to get your PAYE checked?

So, you think we have a case for questioning her PAYE? So, the car benefit of circa 5,500 should NOT appear on her P11D along with the private medical?

She does use the car quite a lot for business use, i.e. going to business meetings. She can claim back fuel for *business use only*. Not sure how much she can claim back per mile but it does not cover the actual cost.

Yes, I think neither the car benefit nor the medical cover should appear. The £2800 allowance should appear instead, unless I've misunderstood your description of how this is all being paid for, or you've misunderstood what's going on.

I would advise that you get an accountant to sort all this out.

Thanks all that replied. I will make enquiries. I will keep this thread updated and post the outcome.

Thanks again.

< snip >

As far as the car is concerned (and as RR says), if it's not a company car, no benefit arises, so it should not appear on the P11D. However, if she is paying her employer a contribution towards the cost of providing it as a "company car", that amount should be deducted from the Car Benefit figure.

385 / month for the car sounds low to me (who pays VED, insurance, repairs etc?), and suggests she's only contributing towards part of the cost. This makes me think it is a "company car" for tax purposes.

BUPA fees (or whichever company it is) should not appear on P11D if your wife is reimbursing the company in full. It she's paying less than full cost, then the balance is a taxable benefit and should appear on P11D. That said, 1,080 pa sounds high - so I guess she's paying in full.

My suspicion is that (a) the employer is not handling this flexible benefits scenario (i.e. salary sacrifice in return for benefits) efficiently for tax purposes. (b) the P11D is wrong and (c) your wife needs to make sure HMRC knows what she's paid (from her after-tax income) towards items appearing on the P11D.

Incidentally, unless I'm missing something, I think there's no significance in the fact that part of her total salary is paid as a "value account". It's usually done in order to make it (a) non-pensionable, (b) non-indexable, (c) identifiable as such (eg where the amount is fixed for each level in the hierarchy, and is not performance related). I assume it's taxed and NI'd each month in the normal way.

Re. business mileage, she can claim tax relief on the difference between

40p/25p per mile, and the rate per mile actually reimbursed by her employer (assuming it's lower...!).

HTH

385 all in. Covers VED, Insurance, repairs and servicing.

I would have thought the £2,800 would be included as taxable salary. On top of that the amounts paid for mileage should be treated as a benefit and the employee can claim for mileage incurred.

It concerns me that the employer may be trying to claim that it is not salary for NI purposes, but it looks like salary to me.

< snip >

Well - if that's for a non-company car then it's a bargain...!

I'm baffled as to why she doesn't know the bases of the car provision (company or private?) nor the deductions made - given that this has gone on for "several years".

I suspect I'm not alone in eagerly awaiting the outcome of your enquiries...!

I agree, I doubt this is a salary sacrifice, and at face value the OP's partner is getting £2800 untaxed pay on top of her salary and Slider did not say whether her additional contibutions come from net or gross pay. Another question that Slider probably wont be able to answer is whether the company are claiming capital allowances on the vehicle as this would demonstrate that the Company Car benefit is not eliminated by the employees contributions.

As an Employer Compliance Manager, I would be interested in the employer as a whole as the OP's partner is not likely to be the ony one on this system.

My wife accepts that it is a company car, it is I that is questioning if there is any tax relief on the portion which she pays for from her own pocket.

10% of gross pay

Can't answer that.

The entire work force eligible for such benefits are all on the same system. This system has been in place for about 4 years. Prior to this, employees were given a choice of car from a list of 10 or so. There was no "10% value account", employees made no contribution to the cost of the company car. Then, this value account came into play.

OK. In that case, and assuming her 10% "value" money is taxed and NI'd correctly each month, then the total contribution she makes towards the company car (after tax, and regardless of which part of her contribution is deemed to come from her "value" money and which part from her "basic" salary) is deducted from the taxable benefit of the car. The balance (if any) of benefit is the figure which should appear on her P11D each year, and she has to pay tax on this at her marginal rate. HMRC normally collect this tax in-year, by adjusting her Tax Code. Which is why I find it strange that she has a K-code, since this suggests her contribution has not been reflected in the P11D figure. Hence her first step is to take the issue up with her employer.

Incidentally, if her contribution exceeds the taxable benefit, there is no tax relief on her excess contribution.

The taxable benefit is a function of the car's original list price, inc any extras, it's CO2 rating etc. It is not affected at all by the actual cost to the company of providing it.

HTH

Simon - I don't understand your comments about claiming CAs. I cannot see how such a claim (or a disclaim) affects the taxable benefit calc.

No, I don't think this is what Simon meant.

What you're saying seems to be that your wife's nominal salary or gross pay is £28k but that she receives an additional 10% of this into this "value account". More than all of this is used to make contributions towards the cost of benefits. The balance which comes out of her own pocket is what Simon is calling the "additional contributions", I think.

These additional contributions are presumably retained by her employer by deductions from pay. The question is whether these deductions are made before or after tax. Another question is whether the £2800 themselves are included in the tax computation.

If the company is claiming CA then they own the car and are making it available to worker, ergo, its a Company Car.

Yes, that is what I was after.

Yes, that was the nail I was going for.

Nail? As in "coffin" or as in "tooth and"?

I do believe I can see the whites of your eyes and, let me tell you, they're all red! :-)

Yes - that's obvious. But you wrote... "...whether the company are claiming capital allowances on the vehicle as this would demonstrate that the Company Car benefit is not eliminated by the employees contributions." which is something entirely different and entirely wrong.

There is no Co.Car Benefit unless it's a company car. And if it's a Co.Car, the employee's contribution may or may not eliminate (i.e. match or exceed) the taxable benefit.

Perhaps you were pondering whether the car was owned or leased by the company (which could affect eligibility for CAs) but in either case it's still a Co.Car and hence a potentially taxable benefit.

However, if the car is hired or leased by the employee, with no subsidy from the employer, then it's not a Co.Car and there is no taxable benefit.

HTH