Payroll
● Where companies provide laptops, tables, computers and office supplies, and they are for business purposes and there is not significant private use, they are non-taxable. Where an employee needs to buy home office equipment to enable them to work from home, they must discuss this with their employer in advance. Where employees are reimbursed for the actual costs of the purchase then this is non-taxable providing there is no significant private use. If an employer does not reimburse their employee, the employee can claim tax relief for these purchases via their tax return or form P87 provided that the amount claimed is incurred wholly, exclusively and necessarily in the performance of the duties of the employment. Employees will need to retain records of any purchases and claim for the exact amount. Any salary advances or loans intended to help employees in times of hardship count as employment-related loans. Where loans are less than £10,000 in a tax year, they are non-taxable. If they exceed this amount, then different rules
...provided that the amount claimed is incurred wholly, exclusively and necessarily in the performance of the duties of the employment...
apply. Where employees are required to self- isolate but cannot do this within their own home, employers can reimburse
the requirement for them to have the equipment or services provided in order to do their job. Any taxable expenses or benefits provided to employees, and related to the coronavirus, could be included in an employer’s PAYE settlement agreement. This means that tax and NICs can be settled by the employer even though the responsibility would normally fall upon the employee or both the employer and the employee. It is important to note that this is only applicable to coronavirus related items. For any employers who payroll benefits in kind, they can continue to report expenses and benefits via payroll, and through P11D returns. There is no requirement to report non-taxable expenses or benefits to HMRC via any method. n
hotel and subsistence expenses; however, this would be a taxable expense.
Where employees are using their own vehicle for business purposes, employers can pay approved mileage allowance payments of 45p per mile up to 10,000 miles and 25p per mile thereafter, without attracting any tax and NICs liabilities. Where an employer does not pay their employee mileage allowance, the employee can claim tax relief through their personal tax account. ‘Significant private use’ should not be determined on the basis of the time spent on different uses, but instead be based on the employee’s duties and
OFF-PAYROLL WORKING (IR35)
Medium and large organisations in all sectors of the economy will become responsible for assessing the employment status of individuals who work for them. Make sure you are compliant with the legislation with our off-payroll working (IR35) webinar and off-payroll working (IR35) and other employment status considerations training course. Find out more and book your place today
Visit cipp.org.uk/training , email enquiries@cipp.org.uk or call 0121 712 1044 for more information.
@CIPP_UK
cipp.org.uk CIPP_UK cip .org.uk
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
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