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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am trying to do my tax return /2015. I had

Resolved Question:

Hi
I am trying to do my tax return for 2014/2015. I had a company car for part of the tax year and my tax code had £9,543 deducted for the BIK so doesn't that mean I've already "paid" for the BIK and shouldn't be taxed further? When I complete my online self assessment I have to fill in the details from my P11D which includes £8,575.76 for my company car - inputting this information into my tax return decreases the amount of tax HMRC owe me so it feels like I'm paying for the BIK on the car twice?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

You certainly aren't paying tax on the car benefit twice. The figure in the tax code is not the tax, it's the estimated car benefit. The P11D has the final car benefit figure and that is the figure which you should put into your tax return.

The tax that has been deducted from your pay (as shown on your P60) is based on the entries in the tax code including the car benefit. If you excluded the car benefit from your tax return, your tax calculation would show a false picture of your tax position as your final tax liability will have been calculated as if you had no company car. The tax that has been deducted from your salary will be deducted at the bottom of the tax calculation. Some of that tax was deducted because there was a car benefit in your tax code.

Think of it like this. If you think you should not include the car benefit in your tax return because it was in the tax code, why would you include your salary in your tax return as that has had tax deducted from it based on the tax code? All the tax return is doing is reconciling your final tax position for the tax year based on actual figures.

I hope this helps but let me know if you have any further questions.

Customer: replied 2 years ago.
Okay I sort of get what you are saying but I honestly do not believe that the amount of tax the self assessment system says HMRC owes me can be correct.
I normally earn £120k and so the tax I have paid this year via PAYE was based on this amount, however, I was on maternity leave for most of the year so only earned £51k. In total I paid £18,259 in tax on this amount and my self assessment says HMRC only owe me £4k which just doesn't seem enough. I have no other taxable income so I don't think £14k tax on a £51k income is correct
Expert:  TonyTax replied 2 years ago.
Can you give me your P60 figures (gross and tax) and the P11D benefits figures please.
Customer: replied 2 years ago.
It's my P45 figures as I resigned in February after my maternity leave ended:
Total pay in the tax year - £51,482.08
Total tax paid in the year - £18,259.28
P11D figures:
Total taxable benefit in the tax year - £8,632.46
Expert:  TonyTax replied 2 years ago.
Thanks.

Your income for tax purposes for 2014/15 was £60,114 (£51,482 + £8,632). The first £10,000 was tax free so you are liable for tax on £50,114.

The first £31,865 is taxed at 20% (£6,373.00) and the balance of £18,249 is taxed at 40% (£7,299.60). Your total tax liability is, therefore, £13,672.60. You paid £18,259.28 through PAYE so you are owed a repayment of £4,586.68.
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