Welsh Income Tax
Prior to April 1999 non-cash vouchers were not subject to NICs, but some exceptions remain: • vouchers exchangeable for sports/recreational activities • vouchers provided to recognise long service (minimum 20 years’ service, maximum. value £50 per year) • vouchers awarded under tax-free suggestion schemes • transport vouchers for severely disabled staff • vouchers (tickets) exchangeable for meals in canteen facilities where meals are provided for staff generally. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Non-cash vouchers which allow the user to obtain “change” for the unused portion of the voucher are treated as cash vouchers for the purposes of taxation. For non-cash vouchers provided by third parties see Taxed Awards Schemes above. Special rules apply where non-cash vouchers are used to obtain the following - stocks and shares, gold bullion, futures, commodities or fine wines, and specialist advice should be sought. WELSH INCOME TAX From April 2019 the Welsh Assembly takes on the authority to vary the rates and thresholds for Income Tax for Welsh taxpayers. HMRC will undertake the collection of all specific taxes for Wales. The first Welsh rate of Income Tax has been set at 10% and means that for the first year the headline rate of tax used in payroll will remain at the rUK rates laid down. The Welsh assembly budget press release of 26 February 2020 confirmed the retention of the 10% Welsh rate of Income Tax and hence the rUK rates remain in force for Wales for the 2020/21 tax year. There is, however, a commitment to have a supplementary budget following the rUK one to deal with any additional matters. WORKS BUSES & PUBLIC BUS SUBSIDIES Employees may travel from home to work Income Tax and NICs free on an employer provided bus with 9 or more seats. This exemption came into effect on the 6th April 2002, and extends that introduced in the 1999 Finance Act which related to buses with a seating capacity of 12 passenger seats or more. No printing, copying or reproduction permitted. From 6th April 2021 the Welsh Assembly is likely to continue to use the rUK rates and thresholds but this is subject to assembly approval. Normally, if an employer pays for, or subsidises, home to work travel for employees, the amount of the benefit is liable to tax and NICs (see also late night taxis above). Where an employer subsidises a public bus service the exemption from Income Tax only applies on a specific bus route for qualifying journeys (i.e. to/from work and between sites) so providing a general bus pass that can be used across a geographic area as many employers have done is not within the exemption.
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