PART 2: TAX
glasses/equipment are available generally to all employees, it should be noted that the cost of spectacles or contact lenses required for general use, including VDU use, which do not require a special prescription for VDU use will be treated as a taxable benefit. From 1st January 2015 the introduction of the Health and Work Service (HWS) permits employers who use the service or whose own occupational health team recommend a ‘medical intervention’ that would assist an employee’s earlier return into the workplace from sickness absence can provide this with no taxable or Class 1A NICs charge up to a value of £500 per employee per year. This could cover, for example, physiotherapy costs that prior to the introduction of the HWS would be deemed a taxable benefit. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS HOME COMPUTING INITIATIVE (HCI) From 6th April 1999 - 5th April 2006 a £500 annual tax exemption existed to enable companies to loan computers to their employees with a view to purchasing the computer from the employer at the end of the loan period. From April 2005, provided the employee paid the full market value at the time of transfer, no further tax charge applied. Most schemes ceased in April 2009 once those on loan at 5th April 2006 had been purchased. MARORS (Mileage Allowance Relief Optional Reporting Scheme) Where mileage allowances are paid at rates less than the statutory rates, employees may be entitled to claim tax relief on the difference between the allowances paid and the allowances that would have been paid had the statutory rates (see MAPs above) been applied. The claim is made via the employee’s Self-assessment return or on Form P87 if they do not receive a Self- assessment return. Whilst there is no statutory duty requiring an employer to report such amounts, the ‘negative’ amounts, which represent the difference between the amount that could have been paid free of tax under the statutory mileage scheme and the lesser amount paid by the employer, may be reported by employers using the alternative and voluntary MARORS scheme. N.B. The authorised reporting scheme (MAPs) must not be used to report on P11Ds allowances that are paid at a rate less than the statutory rate. Whilst use of the MARORS reporting scheme is voluntary, some consider it to be a good and prudent employment practice to advise employees of their entitlement to receive tax relief, and to consider the use of the MARORS scheme. No printing, copying or reproduction permitted. To enter the scheme, the employer should contact HMRC. Alternatively HMRC will accept an employer provided claim for relief under section 336 of ITEPA2003 if it is submitted with the P11D returns. PAYE SETTLEMENT AGREEMENTS (PSA) These were introduced on 6th April 1996 to replace informal arrangements called Annual Voluntary Settlements. PSAs provide a statutory basis for the settlement of tax liability on certain expenses or benefits-in-kind provided by employers. They are voluntary agreements made between an employer and HMRC whereby the employer
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