P11d

[DodgyAgent]

As the owner of my agency and main shareholder with over 30 employees is there anything to stop me from paying all my personal outgoings through the company and then have them taxed as P11d benefits in kind thus saving me NI?

I have been told that the business can pay everything from school fees to gym subscriptions. The only thing I cannot put through is cash

[Darren@UptonAccountants]

As the owner of my agency and main shareholder with over 30 employees is there anything to stop me from paying all my personal outgoings through the company and then have them taxed as P11d benefits in kind thus saving me NI?

I have been told that the business can pay everything from school fees to gym subscriptions. The only thing I cannot put through is cash

Class 1a NIC is paid on benefits in kind.

[DodgyAgent]

Not unless these expenses are solely related to running your business you can't. Othewise everyone would be doing this wouldn't they.

A benefit in kind is what the IR would regard as a personal benefit derived from activities relating to running your business which you wouldn't otherwise get if you weren't running the business (eg corporate gifts such as freebie air fares and holidays offered by clients, memberships to golf clubs etc or a company car that you can drive in your own time as well) it's not the financial management of your personal life which has nothing to do with your business like your weekly shopping at Sainsbury or personal family holidays or your kid's nappies.

I thought you were supposed to be an IT contractor. I am not asking for the personal benefits to be allowed as business expenses I am simply exploring the possibility of them being taxed as benefits in kind. If my personal petrol and car are taxed as benefits in kind then why not my gym subscription or school fees.

Thank you Darren

[Sockpuppet]

Does that involve Che Guevara?

[DodgyAgent]

No I'm not an IT contractor, I am a change manager and part time EB revolutionary.

If you want to show the world what a revolutionary you are then the best way would be to set up your own business and show us how it should be done.
But it is easier to criticise isnt it?

[ASB]

As the owner of my agency and main shareholder with over 30 employees is there anything to stop me from paying all my personal outgoings through the company and then have them taxed as P11d benefits in kind thus saving me NI?

I have been told that the business can pay everything from school fees to gym subscriptions. The only thing I cannot put through is cash

As Darren said class 1A is paid on BIK. However I think it is only certain specific things that come under this regime - it might be worth discussing the exact set of expenses you have with your accountants to see if there is any mileage in finding some which can get thourgh without hitting the class 1a net.

Ultimately the business can pay for what the hell it likes, it's just the tax/ni treatment that has consequences.

Since you mention NI this would tend to imply you are not simply taking a 5k salary and loads of divvies. Letting the side down there I feel.

[DodgyAgent]

As Darren said class 1A is paid on BIK. However I think it is only certain specific things that come under this regime - it might be worth discussing the exact set of expenses you have with your accountants to see if there is any mileage in finding some which can get thourgh without hitting the class 1a net.

Ultimately the business can pay for what the hell it likes, it's just the tax/ni treatment that has consequences.

Since you mention NI this would tend to imply you are not simply taking a 5k salary and loads of divvies. Letting the side down there I feel.

er £6k salary and loads of divvies so the benefit in kind will be 19%

and divvies if I can get our contractors to put some decent hours in

[Nixon Williams]

Class IA NIC is charged at 12.8% on certain expenses, the common ones being company cars, vans, private medical insurance etc.

Benifit In Kind tax is not charged at 19% but at the taxpayer's marginal rate, usually at least 22% if not 40%.

As ASB has said, the company can pay for anything it is the tax treatment that needs to be considered.

My view is that it not advisable to claim for school fees, gym membership etc as the tax implications will not produce the benefits I think you are seeking.

Alan

[ASB]

er £6k salary and loads of divvies so the benefit in kind will be 19%

and divvies if I can get our contractors to put some decent hours in

Then whatever the treatment I *think* you will be on a hiding to nothing.

If the BIK is chargeable then it is simply taxed as extra salary at your marginal rate. This may also involve 12.8% paid by the company for Class 1a. Since the best you can achieve is to reduce the CT liability on the amount paid out then the best you can save is 19% and the minimum you can pay is 22%.

Also since you mentioned company cars you are likely better off NOT claiming mileage from the company, but instead claiming it against you income via your tax return. If you are claiming it against the compnay you will effectively only get 19% relief on the gross, if you claim it against your tax return the this could give you 40%. Worth having if you do loads of miles.

Which I am sure you will looking over all those hard pressed contractors on remote sites....

[PAG]

Not unless these expenses are solely related to running your business you can't. Othewise everyone would be doing this wouldn't they.

A benefit in kind is what the IR would regard as a personal benefit derived from activities relating to running your business which you wouldn't otherwise get if you weren't running the business (eg corporate gifts such as freebie air fares and holidays offered by clients, memberships to golf clubs etc or a company car that you can drive in your own time as well) it's not the financial management of your personal life which has nothing to do with your business like your weekly shopping at Sainsbury or personal family holidays or your kid's nappies.

I disagree. I am sure you must have heard of those high fly city boys get almost everyting paid via company (usually investment banks). House,car, school fees. So business should be able to pay for anything it likes to retain good emplyees and directors. It's the tax where you get screwed.