In the light of Covid-19, the government is considering the publication of this and other government documents on a case by case basis, taking into account the impact of Covid-19 on stakeholders.”
The net pay anomaly unfortunately means that lower earners aren’t receiving the 20% boost on their pension contributions that they would receive if the pension scheme they saved into was operated on a relief-at source basis. It appears that only a small amount of companies use relief-at-source pension schemes, and the majority of businesses actually use net pay arrangement schemes, so the problem is a widespread one.
In the manifesto for the 2019 general election, the Conservative Party promised to fix this problem, and at Budget the government reiterated that it was “committed to reviewing options for addressing these differences.”
We await further details of when the call for evidence is due to be published and will advise members via News Online once this happens.
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Tax treatment of COVID-19 tests and Personal Protective Equipment 7 July 2020
HMRC has updated its guidance relating to the tax treatment of certain benefits and expenses paid to employees due to coronavirus, to explain how employers should proceed where they are providing coronavirus testing kits, or Personal Protective Equipment (PPE) to their employees.
If an employer has purchased coronavirus testing kits or tests completed by a third party to provide to their employees, then they are treated as a taxable benefit in kind on the employee.
Where employees are working in scenarios and the likelihood of the transmission of coronavirus is very high, and a risk assessment determines that PPE is required, then this must be provided to employees free of charge. The PPE must fit correctly. Providing PPE to employees is non-taxable. If an employee requires PPE to complete their job and the employer is unable to provide this, then employers must reimburse the actual expenses of employees purchasing PPE themselves. This is non-taxable and employees cannot claim tax relief on these expenses from HMRC.
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U-turn on tax treatment of coronavirus (COVID-19) tests 10 July 2020
Previously in its guidance on ‘How to treat certain expenses and benefits provided to employees during coronavirus (COVID-19)’, HMRC confirmed that coronavirus tests would be treated as a benefit in kind for tax purposes. This decision, however, seems to have changed, and the guidance now states that coronavirus tests are not treated as a benefit in kind for the purposes of tax. If businesses employ healthcare workers and other eligible front-line staff who get a test through the government’s national testing programme, there is no tax due to be paid, and no requirement to report a benefit to HMRC. There is information on the national testing scheme in the essential workers: get a test today to check if you have coronavirus guide. For employers providing testing kits to their employees, outside of the government’s national testing scheme, there will also be no Income Tax or Class 1A National Insurance (NI) contributions due, whether the kits are provided directly or purchased to be carried out by a third party.
Guidance on the topic will be updated in due course.
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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