director and expenses and milage on p11d or not?

[deans@rubycon.plus.com]

we have ltd company, director salaries 10K and 6k, and PAY ourselves milage payments for travel to contract placement, as well as overnight room costs and £5 breakfast, £5 lunch (for long driving days) and £10 for evening meals when staying overnight plus 5 incidentals. Know mileage and incidentals and room is tax free but are the other amounts tax free? No special dispensation etc.
Do they or all of it need to go on p11d?
We were told allowable costs and not taxable and no p11d by local accountant, is this right?
Also told mileage would still be tax free if for a long term contract, over two years? Seems too beneficial to us to be true?Very grateful for any help here.

[Bob Jones]

As long as the mileage payments are as per the HMRC rates and that they are paid in respect of qualifying journeys you are OK. As yoiu do not have a dispoensation you will have to complete form P11D for the rest - and it is nigh on impossible for you to get a dispensation is respect of scale payments made to yourselves as directors.
Recently I had an article on dispensations published on the Shout99 website - you can see the article at www.internet-taxation.co.uk - click on dispensations.
Mileage on long term contracts over 24 months not allowable and not allowable from day one if you know it will be for 24 months - suggest you visit www.travel-expenses.info for all aspects of the new travel expense legislation.

Bob

[deans@rubycon.plus.com]

Thanks, To clarify we will be taxed in the future on the meals and accomodation adn mileage paid direct by the ltd company unless falls clear of the 24 month rule and/or not classed as ordinary commuting. so we would then need to add all on p11d and get taxed at highest rate of tax? still better than paying ourselves more and then paying the bills ourselves i guess?

[Bob Jones]

You will have to delare accomodation/meals on the form P11D - if the expense is allowable - which the accomodation/meals could very well be then you can claim a corresponding allowance in the relevant box of the Self Assessment return.

Bob