Frequently Asked Questions

What is a P11D dispensation?

For some businesses, April – June is the time of year that they collate the information they need to send to H. M. Revenue & Customs on forms P11D and P9D regarding the amounts of benefits and expenses paid to certain employees and directors during the tax year which ended on the immediately preceding 5th April. For other businesses, such returns are not required or the data needed is substantially lower because they have obtained a dispensation. The dispensation, usually in the form of a notice, sets out the specified expenses payments and benefits that the business will not have to report at the end of year on forms P11D or indeed P9D if relevant. The dispensation is granted if HM Revenue & Customs are satisfied on the basis of what they have been told that no additional tax would be payable by the employees covered on the particular expenses payments and benefits that are then specifically listed.

When approving a dispensation, H. M. Revenue & Customs tend to set out in some detail to which expenses the dispensation applies and in what circumstances. We attach here (P11D dispensation example letter) an example of a response from HM Revenue & Customs which you might find useful to review.

To apply for a dispensation the attached form P11DX should be completed and submitted to the relevant PAYE district

Will VAT impact on my growing business turnover?

Make sure your business plan looks at how you will deal with the impact of registering for VAT. For example, if you provide services to members of the public, registering for VAT may have major implications for your pricing structure.

So will I need to charge UK VAT on these digitised product supplies to ALL my customers, world-wide?

No, there are a number of factors that determine whether and where VAT is payable. Please contact us on electronically supplied services including digitised products for fuller and further advice.

I have received a demand notice for payment of tax. Why?

H M Revenue & Customs has not received payment of the tax liability that is described in the demand notice. If you believe the liability shown is correct , you should pay the outstanding debt without delay so as to avoid any recovery action. H M Revenue & Customs has a responsibility to all taxpayers to ensure that all taxes and duties reach the Exchequer and to ensure that businesses that fail to pay on time do not have an unfair advantage over those that do. This means taking prompt action to recover debts.

We are a UK company operating in another country, which withholds tax from payments made to us; is this right?

It depends on the terms of any double taxation agreement in force. Please contact us for more details.