Taxation of Employee Expenses Call for Evidence 16 June 2017
The Call for evidence continues on the subject of the taxation of employee expenses.
Due to the period of election Purdah closing date for this work was extended until 10 July 2017 to allow interested stakeholders a full opportunity to meet with lead officials from HM Treasury and HMRC.
At the Spring Budget the previous Conservative government confirmed that a call for evidence would be published to better understand the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer.
The main objectives of the call for evidence are to understand:
if the current rules or their administration can be clearer and simpler whether the tax rules for expenses are fit for purpose in the modern economy why the cost to the exchequer of the tax relief for expenses which are not reimbursed has increased
The call for evidence is seeking views on:
current employer practise on employee expenses current tax rules on employee expenses the future of employee expenses
The government will use the information gathered from this call for evidence to inform potential future policy development. No decisions have been made about the issues set out in this document.
The Call for evidence can be accessed on GOV.UK .
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Voluntary Payrolling for a BiK where the new OpRA rules apply 10 August 2017
HMRC has circulated information regarding a concession for employers who are voluntarily payrolling Benefits in Kind (BiKs) in the current tax year under the new Optional Remuneration Arrangements (OpRA).
“…I am writing to clarify the position for employers who are voluntarily payrolling Benefits in Kind (BiKs) in the current tax year under the new Optional Remuneration Arrangements (OpRA).
Employers who have registered to payroll BIKs are seeking clarification regarding the submission of P11Ds when payrolling under OpRA. Some of these employers have been payrolling the tax on OPRA but identify that a P11D will still be due. The current legislative position is that the relevant amount should be reported on Form P11D. However, we appreciate that this will be a burden to employers as they may need to send two separate returns for the same BIK therefore we propose the following concession for employers in this position for 2017-18.
Where an OPRA employer has:
1. registered with HMRC to payroll BIKs outside of OpRA for the 2017-18 tax year 2. and is deducting tax for a BiK which is subject to the OpRA reform
There will be no requirement to complete a P11D as long as they report the Relevant Amount, (per the valuation rules in ITEPA) along with the taxable amounts for payrolling periods through RTI.
Example; £6000 is the relevant amount for 2017/18 in respect of a company car. The employer payrolls from September 2017 and deducts the tax due in respect of the £6000 from the employee’s wages for the remainder of the tax year.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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