The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
Expenses and Benefits Returns on Magnetic Media - submission instructions and technical specification
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Statutory Maternity Leave and Child Care Vouchers 14 October 2016
In light of the Peninsula appeal, HMRC is considering what guidance is required for employers.
Following the decision of an Employment Appeal Tribunal (Peninsula Business services v Donaldson) regarding Child Care Vouchers (CCVs), salary sacrifice and maternity leave, HMRC is considering what guidance is needed. In the interim, they have confirmed the following: “If CCVs are provided under an employment contract, outside the scope of a salary sacrifice scheme, then the vouchers must continue to be provided during maternity leave and other periods of family leave (other than unpaid parental leave). There is legal authority that whether an employer must provide CCVs to a person participating in a salary sacrifice scheme in respect of a period when they are on family leave, depends on the terms of the contract of employment. In the Peninsula case, the contract said that an employee on maternity leave would not continue to receive CCVs. The judgment is only of direct relevance in dealing with similar contractual exclusions.
Employers are free to continue making payments into a salary sacrifice scheme to buy CCVs on behalf of an employee on family leave if they wish.
Use of CCVs that employees already have is not affected by the judgment.”
This information was published in the Employer Bulletin: October 2016 .
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Non-deductible and non-exempt expenses 18 October 2016
From 6 April 2016 any expenses you reimburse to your employees that are fully deductible from their earnings are no longer subject to tax and National Insurance contributions (NICs), provided they are not part of a relevant salary sacrifice arrangement. There is no need for employers to include them on P11D and for the employees to submit deduction claims to HMRC. Dispensations no longer apply. Employers who wish to pay the tax and NICs on non-deductible expenses can still agree PAYE Settlement Agreements with HMRC. For the tax year ending 5 April 2017 expenses payments that are not fully deductible should not be reported on form P11D, but instead should be treated as earnings and the full amount should be subject to tax and Class 1 NICs. For mixed expense payments (for example, home telephone rental) if you can clearly identify the allowable expense amount at the time of payment, only the non-exempt amount will need to be treated as earnings and subject to tax and Class 1 NICs through the payroll. If the non-exempt amount is not clearly identifiable at the time of payment you should treat the full amount as earnings and deduct tax and Class 1 NICs accordingly. Your employees can then claim tax relief for the exempt amount related to business use in the normal manner. Where a benefit is provided that would have previously been included in a dispensation because a fully matching deduction is available, and it is not provided under a relevant salary sacrifice arrangement, the exemption applies in the same way as to paid or reimbursed expenses. If the benefit is not fully matched by a deduction, the full value of the benefit should be reported in the normal way.
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