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Reminder – P11D forms and Class 1A National Insurance

Posted by: edwinsmith on June 30th, 2011

Expenses and benefits paid to employees during the year to 5 April 2011 are required to be entered on forms P11D and P11D(b).  These forms are due to HM Revenue & Customs (HMRC) by 6 July.

The resulting Class 1A National Insurance payment is due to HMRC by 19 July if paying by cheque or due into HMRC’s bank account by 22 July if paying electronically. Please note that HMRC do not operate Faster Payment so the payment will take approximately 3 working days to clear.

Penalties for late filing of the P11D and P11D(b) forms start at £100 for each month that the forms are late.  Penalties and interest pay also be charged if you are late paying the Class 1A National Insurance.

Please contact us if you require any assistance with your forms or payment.

Filed under: PAYE

Mileage Allowance Payments (MAPs)

Posted by: edwinsmith on June 29th, 2011

The approved mileage allowance payment (AMAP) for tax and National Insurance purposes for cars and vans increased from 6 April 2011 from 40p per business mile to 45p per business mile with a restriction for the first 10,000 business miles for tax purposes only.

The current tax rates per business mile are:

Kind of vehicle Rate
Car or van 45p for the first 10,000 miles

25p thereafter

Motorcycle 24p
Cycle 20p


The current National Insurance rates per business mile with no mileage restrictions are:

Kind of vehicle Rate
Car or van 45p
Motorcycle 24p
Cycle 20p


Employees can also receive a tax free payment for carrying passengers on business journeys in their own car or van at the rate of 5p per mile.

Tax rules - What to report, what to pay

If the MAPs you pay to an employee exceed the approved amount for the tax year, then:


  • for company directors or employees earning at a rate of £8,500 or more per year, report the excess amount on form P11D
  • for employees earning less than that, you have no reporting requirements
  • regardless of the employee's earnings, you have no tax to pay to HMRC


If the MAPs you pay are below the approved amount for the tax year:

  • you have no reporting requirements
  • you have no tax to pay to HMRC
  • your employee will be able to get tax relief (called Mileage Allowance Relief, or MAR) on the unused balance of the approved amount – this can be claimed on the employee’s tax return or by completing Form 87 ‘Tax relief for expenses of employment’.
  • you can make separate optional reports to HMRC of any such unused balances under a scheme called the Mileage Allowance Relief Optional Reporting Scheme (MARORS) - contact your HMRC office if you want to enter the MARORS scheme


National Insurance

The rules for National Insurance contributions (NICs) differ from those for tax in a number of ways and take into account a wider range of expenses. NICs are due on payments of relevant motoring expenditure (RME) above a certain level. The maximum amount of RME that can be disregarded for NICs purposes for an employee in each earnings period is called the 'qualifying amount'. The qualifying amount (the amount you can disregard for NICs purposes) where a mileage rate is paid is calculated by multiplying the employee's business miles in the earnings period by the applicable rate per mile from the table above.

NIC rules - What to report, what to pay

If the RME you provide to an employee in the earnings period exceeds the qualifying amount:

  • add the excess to their other earnings for that earnings period when calculating Class 1 NICs (but not PAYE tax) through your payroll


If the RME is below the qualifying amount, you have:

  • nothing to report
  • no NICs to pay


Note that there is no NICs equivalent of Mileage Allowance Relief and you cannot carry forward the difference between RME and the qualifying amount to use in a later earnings period.

Please contact us at Edwin Smith if you require further advice.

Filed under: PAYE, Tax

VAT fuel scale charges from 1 May 2011

Posted by: edwinsmith on June 15th, 2011

VAT fuel scale charges, for taxing private use of road fuel, were amended for periods commencing on or after 1 May 2011.

The scale charge for a particular vehicle is determined by its CO2 emissions figure. Where the CO2 emissions figure of a vehicle is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used. For cars which are too old to have a CO2 emissions figure HM Revenue & Customs (HMRC) have prescribed a level of emissions by reference to the vehicle's engine capacity (cc).

The HMRC website has details of the CO2 emissions amounts and the related fuel scale charges. The tables on the HMRC website show VAT inclusive scale charges applicable in each accounting period, depending on whether it is a 12 month, three month or one month accounting period.

Filed under: VAT

Revised Advisory Fuel Rates – 1 June 2011

Posted by: edwinsmith on June 10th, 2011

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows: 

Engine size Petrol LPG
1400cc or less 15p 11p
1401cc to 2000cc 18p 13p
Over 2000cc 26p 18p


Engine size Diesel
1600cc or less 12p
1601cc to 2000cc 15p
Over 2000cc 18p

The diesel rates have changed slightly as there are now three categories, previous diesel below 2000cc were the same rate thus having only two rates.  As a result, diesel for 1600cc or less has actually reduced by 1p.

The new rates will be effective from 1 June 2011, however for the first month employers may continue to use the previously published rates if they choose to.

These rates will now be reviewed quarterly, with any changes made from the next review being effective from 1 September 2011.  The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

  • Reimbursement to employees of fuel used for business travel in a company car
  • Repayment by employees of fuel used for personal travel in a company car
  • Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, VAT