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CIPP and AAT joint response to the OTS employee benefits and expenses interim report
3 October 2013
The CIPP and AAT have submitted a joint formal response to the recently published ‘Review of employee benefits and expenses: interim report ’ by the OTS, which confirms both organisations support the OTS recommendations. The CIPP and the AAT surveyed their prospective members to obtain views on the quick wins and future recommendations by the OTS (Office of Tax Simplification) in respect of employee benefits in kind. Both the AAT and the CIPP support the OTS recommendations. Encouragingly so does the Exchequer Secretary to the Treasury (XST), David Gauke, as he states in a recent letter to the OTS requesting they continue with their work and report further in the New Year. The full CIPP and AAT joint response can be accessed through the link on the CIPP website .
Mayor of London proposing salary sacrifice season tickets to assist commuters
9 October 2013
It would appear from one of Boris Johnston’s columns in the Telegraph that a recent experience on a London double decker bus has prompted him to propose the use of salary sacrifice to reduce travel costs for workers. Boris Johnson has written a piece in his Telegraph column after a shopping trip into London where he travelled by double decker bus. He observed that “Almost 40 per cent of the compliment are travelling free or at cut price; the pensioners with their freedom passes, the kids, the veterans, the disabled, those in search of work …” He goes on to say, “the result is that the entire burden of fare paying is carried by the 60 per cent and that includes the people who make this country work, the people on low or moderate incomes who travel large distances every day to their places of employment and who have absolutely no choice in the matter.” Boris concludes, “It is time we did something about it and that something is to give tax relief on travel.” He suggests that a scheme comparable to the current Child Care Voucher or Cycle to Work scheme should be introduced whereby the employer would buy the season ticket and deduct the cost from the employee’s pay before the pay is assessed for tax, aka a salary sacrifice arrangement. He also suggests that the new scheme would all be administered online to keep costs down and that the relief would only apply at basic rate. CIPP comment The CIPP supports salary sacrifice as the schemes are beneficial to both the employer and the employee through tax and NI savings. The recent OTS Expenses and Benefits Interim report highlighted a lack of understanding and/or resource of salary sacrifice in the SME sector and coupled with the fact that salary sacrifice schemes are not operated by all businesses, would the commuters who really need these savings actually benefit? Under current rules employers can offer interest free beneficial loans of up to £5,000 pa for season tickets but this is a post-tax arrangement. As announced in the year’s Budget, this amount is due to be increased to £10,000 from April 2014. At this stage this is only a proposal that has been put forward to the Chancellor. The CIPP would expect formal consultation to take place before any decision is made. We will of course keep our ears to the ground on this one and keep members duly informed.
CIPP Policy News Journal
16/04/2014, Page 145 of 519
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