PART 2: TAX
Travel between the workplaces of two different employments is not business travel with one exception - where a person is an employee of more than one company in the same group of companies, travel between the workplaces of each employment is business travel - see http:// www.hmrc.gov.uk/manuals/eimanual/EIM32035.htm. Travel between home and a temporary workplace is not normal commuting as long as: • the employee is likely to spend less than 40 per cent of his or her working time at that particular workplace, or • it is not a regular occurrence, or • the duration of the attachment to the temporary workplace is no more than 24 months. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Where business travel conditions are not met, the workplace is regarded by HMRC as a permanent workplace. Travel between the new workplace and home will then be classed as ordinary commuting, and so cannot be reimbursed without a tax and NICs charge arising. The change from business travel to ordinary commuting occurs as soon as it is known that the temporary workplace travelling will exceed 24 months, not when the 24 months expires. Incidental Overnight Expenses An employer may reimburse, tax-free, incidental expenses (e.g. private phone calls or newspapers) incurred to the maximum value of £5 per night (£10 outside the UK) when the employee is on company business. Where the payment exceeds the limit the whole payment is taxable (not just the excess). Where the employer requires that an employee pay back any excess over the limit the payment should be deemed as not exceeding the limit. Where such expenses cover a continuous period in excess of one night away, the £5 exemption for each night is applied on a cumulative basis to the total payments throughout the period. This ‘averaging’ principle must be applied to an unbroken period of consecutive nights in its entirety. An entire continuous stay cannot be broken up into separate claim periods in an attempt to meet this principle. N.B. Business expenses which meet the above criteria incur neither Class 1 or Class 1A NIC, nor PAYE liability and need not be entered on P11D or P9D returns. TRIVIAL BENEFITS Section 203(1) of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003 permits benefits to be exempt from tax if their cash equivalent value is so trivial that it is not worth reporting and charging to tax. There are no set rules for determining whether a gift might be classified as trivial. Cash benefits, benefits with a monetary value and non-cash vouchers, however small in amount, cannot be classified as trivial. Trivial benefits will often be of a consumable or perishable nature and common sense must be applied. Current HMRC guidance on trivial benefits can be found at https://www.gov.uk/expenses-and-benefits-trivial-benefits. No printing, copying or reproduction permitted. HMRC guidance for example quotes such items as: • tea, coffee or water provided at the workplace • a small gift in recognition of an event such as the birth of a baby or marriage, but not as a
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