The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald
The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald.
By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.
All the talk in the finance world surrounds Wednesday’s Budget remarks by the Chancellor of the Exchequer George Osborne.
But, because this column was written ahead of the Budget, you’ll have to wait until next week’s Money Matters column for the full verdict on Mr Osborne’s plans.
Meanwhile, in other finance news . . .
New company car advisory fuel rates have been published which took effect from 1 March 2016. The guidance states:You can use the previous rates for up to one month from the date the new rates apply. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 March 2016 are:
Engine size Petrol
1400cc or less 10p
1401cc - 2000cc 12p
Over 2000cc 19p
Engine size LPG
1400cc or less 7p
1401cc - 2000cc 8p
Over 2000cc 13p
Engine size Diesel
1600cc or less 8p
1601cc - 2000cc 10p
Over 2000cc 11p
Other points to be aware of about the advisory fuel rates:
Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC.
If you would like to discuss your car policy, please contact us at Clay Shaw Butler.
From 6 April 2016 there are a lot of changes to the way in which benefits and expenses are reported to HMRC.
HMRC have set out the maximum tax and NICs free allowances that can be paid by employers to employees for subsistence. Subject to qualifying conditions, the amounts are set out below:
Minimum journey time Maximum amount of meal allowance
5 hours £5
10 hours £10
15 hours £25
Where a meal allowance of £5 or £10 is paid and the qualifying journey in respect of which it is paid lasts beyond 8pm a supplementary rate of £10 can be paid.
Employers may choose to reimburse employees for the actual costs incurred. However where employers wish to use bespoke rates other than those set out above, they will need to apply for approval from HMRC for bespoke rates.
HMRC have issued an online application form to allow employers to request approval for these bespoke amounts. This should state the rate that the employer wishes to pay and also needs to demonstrate that the amount is a reasonable estimate of the amount of expenses actually incurred by the employees.
To establish these amounts, HMRC have confirmed that the employer should carry out a sampling exercise to verify the actual expenses incurred by employees. At Clay Shaw Butler, we would be happy to advise you on the sampling which would need to be carried out for your business.
In addition, employers will need to have a checking system in place which ensures that the payments or reimbursements are only made on occasions where the employee would be entitled to a deduction from their earnings and that the employees have actually incurred and paid the amounts.
Once approval has been given by HMRC, they will issue an approval notice which sets out the date from which the approval is given and what expenses are covered. It will also state the date when the approval notice ends which will be no later than five years from the start date.
Please do get in touch if you would like help with benefits and expense reporting or agreeing Bespoke rates.
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) -
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