Payroll insight
apply to these cars. Where private use – apart from ordinary commuting and local private mileage when ‘on call’ – is prohibited, then the use of the car can be treated as exempt from a tax charge under section 248A ITEPA. The writer is aware that some fire and rescue services do this for their flexible duty officers as they are always ‘on call’ whenever they are in their cars and, unless having advised their control otherwise, are always available to respond to emergencies. Other emergency services officers are provided with cars which are available for both private and business use and which are fitted with ‘blues and twos’ are taxed under the ‘use of assets’ legislation, as set out above. In these instances, any ordinary commuting mileage is not covered by an exemption and is treated as private mileage. However, in examples seen by the writer, the business mileage is normally well in excess of any private mileage. Therefore, with effect from tax year 2017–18, whilst these cars will still be subject to a tax charge as assets, the changes to the tax legislation will mean that officers can no longer deduct the
business element of the taxable benefit. At a recent HMRC meeting with a client we discussed the changes and, following a CIPFA (Chartered Institute of Public Finance and Accountancy) police forum, we were provided with the new guidance from HMRC on ‘assets made available’. This showed that from 6 April 2017, the same chargeable amount would be used as the basis for calculating both the tax and Class 1A NICs even if the asset is used for ...employers need to review policies to ensure that they do not fall foul of the new rules private and business purposes. A review of the Finance Act 2017 confirmed this and found that the paragraph that allows the deduction for the business element had been amended to remove the deduction for benefits provided under the ‘use of assets’ legislation. Consequently, there will be
a significant increase in the benefit in kind for these officers and the following actions will needsto be taken as a matter of priority: ● officers will need to be advised of the changes ● employers will need to review operational policies on the provision of vehicles, and ● consideration will need to be given to the potential availability of the statutory exemption for certain cars where private use is allowed but restricted. The use of assets legislation can apply to any asset provided to an employee without transfer of title, so employers need to review policies to ensure that they do not fall foul of the new rules. Please note that where an asset is provided for use by an employee to carry out his or her work then this may be exempt under section 316 ITEPA (accommodation, supplies and services used in employment duties) even if there is some private use. However, cars are specifically excluded from this exemption. Employers should be considering what assets are made available in their business as a matter of priority. n
Employment tribunal fees unlawful
Landmark court victory means end of tribunal fees
O n 26 July, the Supreme Court – the UK’s highest court – unanimously ruled that the government was acting unlawfully and unconstitutionally when it introduced employment tribunal fees four years ago. UNISON, the trade union, brought judicial review proceedings against the government in 2013. The fees started at around £160 for a type A claim, such as wage claims, breach of contract; and £250 for a type B claim, covering issues such as unfair dismissal, race and sex discrimination. There was also a hearing fee of £230 for Type A and £950 for Type B claims, with an additional £400 lodging and £1,200 hearing fee for appeals
to the employment appeal tribunal. The government are expected to refund more than £27 million to the thousands of people who paid fees for taking their claims to tribunals since July 2013. The Supreme Court judges said fees were set so high that there was a deterrent effect upon discrimination claims, among others, and more genuine cases were put off than the so-called vexatious claims the government claimed fees were meant to deter. UNISON’s evidence showed the fall in claims when fees came in was “so sharp, so substantial and so sustained” that they could not reasonably be afforded by those on low to middle incomes. Fees particularly
deterred the kind of ‘low-value’ claims generally brought by the most vulnerable workers. Dave Prentis, general secretary of UNISON, the trade union which brought judicial review proceedings against the government in 2013, said: “The government is not above the law. But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work…We’ll never know how many people missed out because they couldn’t afford the expense of fees. But at last this tax on justice has been lifted.” n
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| Professional in Payroll, Pensions and Reward |
Issue 33 | September 2017
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