Benefits in kind and forms P11d
We are now in the middle of the annual process of dealing with returns of benefits in kind for directors and employees earning over £8,500pa (which is most of them). The whole exercise is time-consuming and since the forms carry a potential penalty for error of £3,000 each, they demand a close attention to detail on what are normally small amounts.
This was all brought into focus recently by HMRC producing the statistics for taxable benefits in kind and expenses payments for 2007/08. According to their records they had returns for over 4.1 million people being 460,000 directors and approximately 3.7 million employees. The returns produced a taxable value of £8.8 billion. I accept that this is a lot of money but I would really like to see how the tax take equates to the cost of dealing with the paperwork. I just have a nasty feeling that the two would come close to balancing out.
Having said which I have no better idea of how to manage the system. The last government looked at taxing benefits through the payroll which seemed to require the same level of detail plus an element of foresight. I just wish someone could come up with some other more time-effective system.
Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Cathy you can call her on 01908 605552.
Date: 16th June, 2010
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