Tax mistake: big fine
A mistake on a P11D form could cost your company £3000.
That’s the maximum fine Her Majesty’s Revenue and Customs (HMRC) can impose.
Tax specialist KPMG warns that HMRC is becoming stricter on levying penalties under a new risk-based approach.
KPMG cites the failure to report private use of a company van as one of the most common P11D errors.
An incorrect P11D could land you a fine of up to £3000 from the taxman
KPMG says: “Where vans are taken off your premises overnight by your employees, a van scale charge may be imposed of £3000 regardless of the van’s age as HMRC will assume the vehicle is being taken away for private use.
“The only way to eliminate this charge is to completely satisfy some quite onerous requirements to prove that there is no private use.”
KPMG advises van operators to review the terms of van usage each year before submitting P11Ds.
Other common fleet-related and company car P11D mistakes include:
• Incorrect list and accessory prices for company cars, which leads to incorrect company car benefits.
• The failure to take CO2 emissions data from the V5 registration document for company car/fuel scale benefits.
• Mileage allowance payments that exceed the HMRC Approved Mileage Allowance Payments (AMAPs).
John Chaplin, KPMG employment tax director, said: “We are seeing tax inspectors taking a much more adversarial stance and showing a greater appetite for imposing stricter penalties.
“As the fine is per incorrect form submitted, the penalties can soon add up. Potentially an employer could find themselves being fined over and over again for the same mistake if they have made it repeatedly on a number of employees’ P11Ds.”
As well as a fine, a company could also gain an increased risk profile with HMRC. This can potentially affect the way HMRC deals with that company in the future.
Chaplin said: “Historically, HMRC have not levied the fines and penalties available to them other than in exceptional circumstances. However, we suspect this may well change this year.”
Further information
The last working day to submit P11Ds was Friday 04 July: the official deadline was Sunday 06 July. Filing P11D forms any later than 04 July will result in employers receiving a £100 penalty from HMRC.
