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bigduckontax, Accountant
Category: Tax
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My new client is a limited company providing the services of

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My new client is a limited company providing the services of the director within the media industry.
The company has no business premises, although substantial duties are performed by a personal assistant and bookkeeper (whose address is also the registered office) who both work from their respective homes, some considerable distance from the director.
The company undertakes work for a small number of client companies. The vast bulk of the company's income, though, comes from a small number of different contracts with one particular tv company, one of which is for a three-year duration. The others are for a specific number of episodes within a short time span.
All of the tv contracts require filming at studios about 200 miles from where the director lives, although he is also often required to travel to different locations around the UK as part of his contract. He is also required to attend meetings regularly in London and other places, and occasionally needs to make personal appearances.
Away from the tv contracts, business use of the car is limited, although in the past he has travelled extensively for book signing sessions. To a limited extent the chauffeur does also get used for personal journeys.
The company owns the car and provides fuel for private use, easy enough to calculate the benefits for the P11D. However, it also employs a chauffeur who clocks up maybe 40000 miles a year, largely driving the director between home and the studios, enabling the director to work during many journeys and relax on many of the late night return journeys.
The chauffeur lives close to the studios, and since the director stays for a few days at a time, a large chunk of the mileage is without a passenger. The car and chauffeur are also occasionally used on other company business without the director being carried.
I'm aware that a chauffeur would normally give rise to a benefit in kind equivalent to the cost of his salary and employers NIC, but can the benefit be pro-rated for business/personal use? And if so, just what constitutes business use in this case? Can travelling between home and studios be considered to be business, at least for work on the short contracts?
The former accountant has declared the full benefit on the P11D, so if it is possible to pro-rate the benefit, how do we go about amending earlier years (and earlier years of the director's Self Assessment tax returns).
Many thanks for reading this far, and any help you may be able to offer!
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Customer: replied 2 years ago.
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Hello. I am Keith. one of the experts on Just Answer, and pleased to be able to help you with your question.

It is a general proposition within UK taxation that an individual is responsible for the cost of getting from his residence to his normal place of business and that he can only have one such place. In this instance there is no such regular place of business as they operate from home. So this should not have been declared on the P11D as a benefit in kind. If this form requires amendment for previous years then the ball can be stated rolling by simply writing to the tax office concerned seeking to adjust prior year positions. HMRC may well adopt an approach that the studio to which the individual travels the most is his regular place of business and disallow that travel.

I do hope that I have helped resolve your conundrum.

Customer: replied 2 years ago.
Many thanks for your response.So it seems that if I adopt the approach that the vast bulk of mileage will be business, do I have to pro-rate the benefit for the undoubted private mileage undertaken (eg to social functions, collecting his parents etc)? If so, do the gross benefit values go on the P11D with an employee contribution, or just the business proportion?

The gross private mileage usage is the matter to be disclosed in the P11D.

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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 6332
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