Frequently Asked Questions 2010-11

Frequently Asked Questions – P11Ds 2015-16

Safeguarded Travel

a) How is my Safeguarded Travel worked out? There are three levels of benefit for Safeguarded Travel, and these are determined by the Association of Train Operating Companies (ATOC) each year based on the cost of providing the travel benefit to you.

For the 2015/2016 tax year, the total annual charges for passes are as follows:

– Status Pass Holders £1459.31 – London £ 879.67 – Provincial £ 684.58

Each charging basis is made up of the following elements:

– Administration Fee £ 42.67 – Leisure £ 252.65

– Residential – – Status Pass £1163.99 – London £ 584.35 – Provincial £ 389.26

If you joined or left Network Rail between 6 April 2015 and 5 April 2016, the annual charges will be pro-rated accordingly.

b) Is my safeguarded travel pass taxable? Yes, Network Rail pays ATOC to provide you with a safeguarded travel pass, this is classified as a benefit derived from employment and it is therefore subject to Income Tax.

c) Why am I liable to pay Income Tax on the total annual charge even though I don’t make use of or have access to all the travel facilities attached to my safeguarded travel card? HMRC rules require that the cost of the benefit to the employer is the value of the benefit in kind chargeable to tax. This is regardless of whether you use leisure and residential travel facilities, leisure only or residential only.

d) I have turned 60 years of age in the last tax year, what happens with my Safeguarded Travel? Once you reach 60 years of age, a one-off lump sum payment is made by Network Rail to ATOC to secure this benefit for you for future years. The lump sum payment is entered on the form P11d the year you reach age 60. This determines your tax liability for the current and future tax years.

No P11d’s will be submitted to HMRC on your behalf by Network Rail for Safeguarded Travel after this year.

Network Rail Infrastructure Limited Registered Office: Network Rail, 2nd Floor, One Eversholt Street, London, NW1 2DN Registered in England and Wales No. 2904587 www.networkrail.co.uk e) I left Network Rail before my 60th birthday and I have safeguarded travel benefit what will happen to my benefit? If you leave Network Rail before your 60th birthday and you have safeguarded travel as long as you didn’t resign or get dismissed you will retain the benefit for life, however a lump sum will be paid on your behalf to retain the benefit for which you will have to pay tax on that amount. You will have received a letter detailing the amount of the lump sum; you are liable to report this to HMRC.

f) Can I give up part of my safeguarded travel? No you cannot. Even though the benefit has two parts (residential and leisure) it is a consolidated benefit and you can’t have one without the other. If you choose to give the benefit up you will not be entitled to regain the benefit in the future.

Private Medical Insurance

How is my Private Medical Insurance worked out? All Band 1 and 2 employees are entitled to Family Cover and can select to sell all or part of the Health Care Plan. (See annual Medical Cover values below)

Band 3 employees are entitled to Single Cover and can purchase additional cover for their dependant children, partner or spouse. The additional cover is not reported on the P11D.

Annual Medical Cover values are as follows:

Family £1,340.00 Married Cover £1,051.00 Single Parent Cover £ 757.00 Single Cover £ 467.00

If you join or leave the employment of Network Rail between 6 April 2015 and 5 April 2016, or your band or cover type changed during this time, values will be pro rated.

Company Cars

a) How is my company car benefit calculated? Factors, for example the cars list price and fuel type and emissions rate, are applied to determine the correct HMRC percentage rate to use in the calculation of the P11d benefit value (see example below).

This value is reduced by any capital contributions or private use contributions you make through payroll throughout the tax year.

If you have used more than one car during the tax year, or only had availability of a car for part of the year, for example as a new starter or receiving this benefit due to a promotion, each car will be shown individually on the P11d.

Network Rail Infrastructure Limited Registered Office: Network Rail, 2nd Floor, One Eversholt Street, London, NW1 2DN Registered in England and Wales No. 2904587 www.networkrail.co.uk For example:

List price of CO2 emission rate Days the car Total value for car (HMRC set value) available to P11D 115-119 Diesel employee £17955.00 21% 366 (Leap year £3,770.55 2016) £17955.00 21% 183 (part year £1,885.27 benefit for new starter)

b) Do I incur an additional tax liability for using my company car for personal use? Yes, if you use your company car for personal use and do not reimburse Network Rail for all your personal mileage you will be liable to pay tax on the usage. In this situation HMRC require employers to assess the benefit based on a set fuel value.

For 2015/16 this is £22,100.00 per annum. This value has the same CO2 emission percentage rate applied to assess your company car liability to determine fuel benefit value.

For example:

Fuel benefit CO2 emission rate Days the car Total value for (HMRC set (HMRC set value) available to P11D value) 115-119 Diesel employee £22,100.00 21% 366 (Leap year £4,641.00 2016) £22,100.00 21% 183 (part year £2,320.50 benefit for new starter)

Company Vans

My van benefit has changed – why is this? As from 6 April 2015 HMRC changed the rate on which personal use of a company van is charged. This rate increased from £3,090 per year to £3,150 per year.

The P11D value for 2015/16 will be based on this rate plus an additional flat rate fuel benefit charge of £594, therefore a flat rate total of £3,744, which is pro-rated based on the number of days the van was available to you during the tax year.

a) How are the subsidy payments for rail and underground season tickets treated for tax and National Insurance purposes? All subsidy payments are subject to National Insurance (NI) and Income Tax liabilities. NI is due on the subsidy and is deducted at the date of payment through the payroll as different rules apply for NICs.

The subsidy amount is reported as a taxable benefit in kind (BIK) using the form P11d and is reported to HMRC by the company for Income Tax.

You should consider that as the BIK is annually reported to HMRC on the 5th July, this reports the receipt of the subsidy for the previous tax year (6th April -5th April). This imposes a deferment on the tax due to be paid because of HMRC reporting timescales and rules.

Due to this deferment HMRC have stated that the procedure to follow in this situation is to instruct you, as the employee, to pay the tax due on the benefit for the first year as a direct payment under Self Assessment. An adjustment is then made to your tax code for the next and subsequent tax years, as there is a supposition that a comparable benefit will continued. You should make financial provision to pay tax due on this basis.

Alternatively, you can advise HMRC on 0845 300 0627 of the BIK once you know the value of the subsidy (you can estimate the amount if necessary but we do not recommend this) and ask for your PAYE coding to be adjusted immediately. The tax due for the first year can then be recovered by way of PAYE deductions during the same tax year.

b) Why is the P11d figure not equal to the cost of my ticket? This is because the P11D figure relates only to the subsided part of the benefit; which Network Rail pays for on your behalf. This is currently 75% of the full ticket cost or the capped amount of £2,250 for a 12 monthly ticket or £1,125 for a 6 monthly ticket.

The remaining cost of the ticket is the loan value that is fully repayable to Network Rail by instalments over 5 or 10 pay periods.

c) I have received a refund for this ticket but my P11d still shows the original value. If you have not seen the refund on your payslip then Network Rail may still be waiting for an amendment from our Season Ticket supplier. When the refund comes through and displays on your payslip we will send you an amended P11d showing the corrected figure. Additionally we will send HRMC an amended P11d on your behalf.

If you have seen the refund on your payslip and you have not yet received an amended P11D please contact our Customer Support Services team or email [email protected] as soon as possible.

Network Rail Infrastructure Limited Registered Office: Network Rail, 2nd Floor, One Eversholt Street, London, NW1 2DN Registered in England and Wales No. 2904587 www.networkrail.co.uk d) What are the criteria for subsidy to be included in this year’s P11d? Anyone receiving a ticket from the Season Ticket provider dated between 6 April 2015 and the 5 April 2016 will be included on the P11d reporting process. However, if you have been redeployed and have received a relocated season ticket as part this process, the additional cost will be excluded from the P11d.

e) This is the first time I have received a P11D why is this? From the 5 April 2010 Network Rail changed the way we issue Season Tickets to employees. From this date we use a service provider, currently (Abellio Corporate Services) to issue the ticket to you. This constitutes a benefit in kind consequently we must report the subsidy value to HMRC.

f) Why is my Season Ticket Subsidy benefit not pro-rata? Season Tickets benefit do not have a set anniversary date like other benefits e.g. Healthcare, Safeguarded Travel, therefore HRMC stipulate that all Season Ticket Subsidies must be reported in full for the tax year in which they operate.

g) Are there tax implications relating to taking out a Season Ticket Loan? There is no taxable benefit until the total of all your loans from the company exceed £10,000 at any one point during the tax year (from 6 April through to the following 5 April). Where the £10,000 limit is exceeded a BIK arises on the avoided interest based on the ‘official rate of interest’ as confirmed by HMRC, for 2015/16 this is 3%. This value is shown on the form P11d.

Finally, if you believe that your P11d contains an error or omissions please contact us at [email protected] by 10 June 2016. We will investigate your enquiry and issue a corrected document upon verification of your declaration. You will receive this by the 05 July 2016.

Network Rail Infrastructure Limited Registered Office: Network Rail, 2nd Floor, One Eversholt Street, London, NW1 2DN Registered in England and Wales No. 2904587 www.networkrail.co.uk