Open to all employees of a business
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Where these conditions are met, the employer will not be required to report anything to HMRC, or to pay any tax and National Insurance (NI).
The intention of the exemption is to allow for costs of provision which are generally incurred for the purposes of the event itself, and that the event, along with any associated provision, is available to employees generally.
The Employment Income Manual (EIM) has been updated to reflect this change, as follows:
“Where an annual function is provided virtually using IT then the exemption is capable of being met provided all other conditions are also satisfied as the exemption applies to allow for costs of provision which are generally incurred for the purposes of the event itself.”
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Making a late election in relation to the disguised remuneration loan charge 24 November 2020
Individuals had until 30 September 2020 to report their outstanding disguised remuneration loans, by using a loan charge reporting form. This form gave individuals the option of spreading their outstanding disguised remuneration loan balance over three tax years. HMRC has confirmed that it will also accept late elections that are made by an individual, or an agent on their behalf, on or before 31 December 2020. This process will allow individuals to include a third of their outstanding disguised remuneration loan balance on their Self-Assessment tax return for 2018-19. HMRC has released a statement, which details the general approach to elections made after 30 September 2020, and also provides information relating to the procedures that must be followed. HMRC will even consider applications for a late election if it falls after 31 December 2020, but this will require the individual or their agent to provide HMRC with more detail prior to the late election being accepted. If an individual applies for a late election after 31 December 2020, they are liable to pay the loan charge (based on the full outstanding disguised remuneration loan balance) on their 2018-19 Self-Assessment tax return, until an officer has confirmed it is accepted. HMRC considers the time allowed for making an election and the automatic acceptance of any late election, made on or before 31 December 2020, to be generally adequate. HMRC accepts that there may be exceptional reasons as to why an election was not made in the specified time frame, but will not make routine use of its powers to accept late elections after 31 December 2020. HMRC will allow late elections which couldn’t have been made within the statutory time limits for reasons beyond the individual’s control. These reasons include circumstances where all of the following applied: • The individual was ill or otherwise absent for a good reason • The absence or illness occurred at a critical time, which prevented the individual from making an election on or before 30 September 2020, or a late election on or before 31 December 2020 • There was an appropriate reason as to why the election was not made prior to the time of the absence or illness • There was no other person who could have made the election on the individual’s behalf on or before 30 September 2020, or the late election on or before 31 December 2020
HMRC would not class the following as reasons beyond the individual’s control:
• Oversight or negligence on the part of the individual or their agent • Illness or absence of an agent or adviser to the company
There may be cases that fall outside of the general approach, where it would be unreasonable, given the overall circumstances of the case, for HMRC to refuse a late election. It is probable that such cases will involve a number of factors, but the following criteria may be relevant:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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