Legislation will be introduced in Finance Bill 2016 to provide a statutory exemption from tax for qualifying trivial benefits in kind costing £50 or less.
At Budget 2014, the Government announced a package of measures to simplify the tax treatment of employee benefits and expenses, helping to reduce employer burdens. This package included a statutory exemption for low value benefits in kind (‘trivial BiKs’). Legislation to exempt from Income Tax trivial BiKs costing £50 or less, where certain conditions are met, was deferred from Finance Act 2015 and has now been included in Finance Bill 2016 . Employers will no longer be required to report such benefits on either form P11D or via PAYE Settlement Agreements (PSAs) at the year end. In response to consultation on draft legislation published in December 2014, an annual cap of £300 will be introduced for directors and other office holders of close companies and members of their families and households who are also employees of the company. The trivial benefits exemption replaces a concessionary practice, whereby an employer is required to agree with HMRC whether a benefit can be treated as trivial and so not reported to HMRC. A corresponding disregard will be introduced to remove any liability for Class 1 NICs for any qualifying non-cash vouchers provided under the exemption.
Employment Intermediaries and tax relief for travel and subsistence 14 December 2015
Following confirmation at Autumn Statement 2015 that the government will legislate to prevent workers engaged through employment intermediaries from benefiting from tax relief for home to work travel expenses, draft legislation has now been published for consultation. The legislation will mean that relief will be restricted for individuals working through personal service companies where the intermediaries’ legislation (IR35) applies, and for individuals working through other employment intermediaries where the worker is under supervision, direction or control in the manner they carry out the work. Liability for any debt resulting from these measures can be transferred to the director of an employment intermediary, or, where a test of supervision, direction or control is being used, to another relevant party, if that party has misled the employment intermediary by providing a fraudulent document.
The Government has also published a summary of responses following the consultation ‘ Employment Intermediaries and Tax Relief for Travel and Subsistence ’ published at Summer Budget 2015.
Provided the proposals in the draft legislation are approved by Parliament, the changes will be introduced in Finance Bill 2016 and will come into force on 6 April 2016.
Employer provided living accommodation – call for evidence 15 December 2015
A call for evidence has been published to find out what complexities employers currently face and what, if any, simplification could be made.
Employer provided living accommodation is a benefit in kind and is liable to tax and employer Class 1A National Insurance contributions. The current rules setting out how and when employer provided accommodation should be taxed have been in place for a long time, and some parts are over 40 years old. The government would therefore like to understand how well understood the rules are, and to what extent they are still relevant and appropriate today. In 2010 the government set up the Office of Tax Simplification (OTS) to give independent advice to the government on simplifying the tax system. The OTS published two reports in January1 and July2 2014 covering their review of employee benefits and expenses. The review included employer provided living accommodation. This highlighted that, while the world of work has moved on, the tax rules for employer provided accommodation have not. Their main findings were that:
CIPP Policy News Journal
25/04/2016, Page 149 of 453
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