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Sam Pathak
Sam Pathak, Mr S Pathak MBA FCCA CTA
Category: UK Tax
Satisfied Customers: 464
Experience:  Tax Consultant & Freelance Lecturer over 9 years experience
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Hi Sam. I am a musician and have started my own limited company

Resolved Question:

Hi Sam. I am a musician and have started my own limited company to look after the affairs of my music business. I will have a lot of mileage to cover including European travel. Does the limited company need to be registered as an employer before I can claim a mileage deduction for corporation tax purposes?
Submitted: 1 year ago.
Category: UK Tax
Expert:  Sam Pathak replied 1 year ago.

Hello,

Thank you very much for your question and directing it at me.

I am going to offer you slightly longer answer here.

To start with, ideally, you would need to register for employer PAYE scheme. However, as there is very little risk from the perspective of HMRC (as there is no tax loss as such to them), you won't.

Let me explain further .........

If you get, from your company, only approved mileage payments (which is tax-free), you don't need to register.

If you get your other travel expenses reimbursed from the company (fist you pay for such expenses and then claim from company), this is where, ideally, you would need to register, as technically, this needs to go through P11D (taxable benefits), and you claim as a genuine 'business expense' (under something called 's336 claim', too technical!). So this will be a 'contra' , that is, in and out, resulting in no tax, therefore, very little risk from HMRC perspective.

So, I would say, you won't really need to register for employer PAYE scheme just for this travel/mileage related expenses.

Also,
If none of employees (which may not be relevant here) and directors paid exceeding ££5,667 per year, no PAYE/Payroll needs to be set up! And, this is the case even under new rules of RTI.

So, the answer is, 'no', 'not' really!

I trust the above helps, and have not confused you even more!

Best wishes
Sam Pathak
Sam Pathak, Mr S Pathak MBA FCCA CTA
Category: UK Tax
Satisfied Customers: 464
Experience: Tax Consultant & Freelance Lecturer over 9 years experience
Sam Pathak and other UK Tax Specialists are ready to help you

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