Capital Contribution on Payroll Form

Capital Contribution on Payroll Form

I think payroll have been filling in the payroll P11d form wrong. Because I made the choice to have a car that is above my grade, I have to make a capital contribution towards the cost.

I have had the car for 4 years and the capital contribution is spread over 48 monthly payments. I had the notes below sent to me, but don’t really understand them. I also looked at 480(2011) Expenses and benefits A tax guide.

Section 132 of the Income Tax (Earnings and Pensions) Act 2003 states the following about when contributions can be brought into the calculation:

The amount of the deduction allowed in any tax year is the lesser of —

(a) The total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of

(i) The car, or

(ii) Any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car for the tax year in question, and

(b) £5,000.

I believe option 3 would be in line with the rules but have had different opinions

OPTION 1

My interpretation of the notes as follows:

If I was making say a £1440 capital contribution = 48 No £30 monthly payments

In year 1, £360 would be inserted in the capital contribution box

In year 2, £720 would be inserted the capital contribution box (year 1 + 2)

In year 3, £1080 would be inserted the capital contribution box (year 1 + 2 + 3)

In year 4, £1440 would be inserted the capital contribution box (year 1 + 2 + 3 + 4)

OPTION 2

Each year enter £360 for each year 1 to 4

OPTION 3

Each year enter £1440 for each year 1 to 4

If their interpretation is incorrect and the wrong figures have been supplied to the Inland Revenue, how would I go about getting it put right? Is it something I need to take up directly with the Inland Revenue or is it down to work to send in corrected P11d’s

Capital Loss Tax Question

Capital Loss Tax Question

Can I offset my capital gain in rental real estate sale against carried over capital loss in stocks in previous years?

 SUBSCRIBE to YOUTUBE

PINTEREST