Given the significance of expenses to employers, employees and the tax system, the government wants to ensure that the rules are effective, and to understand more about why the claims for non-reimbursed expenses have increased.
The government published their response to the call for evidence and respondents did not agree on a definitive cause for the recent increase in Exchequer cost for non-reimbursed expenses and the number of employees claiming this tax relief. However, they did indicate a few reasons that could have contributed. Some thought increased cost pressures for some organisations means that they are reimbursing their employees’ business expenses less generously than before, leading to more employees with non-reimbursed expenses and therefore more employees eligible to claim tax relief from HMRC. Others suggested that employees’ knowledge of how to claim, although still generally limited, may be improving due to guidance and advertising by third parties.
The government announced at Autumn Budget 2017 that it will:
work with external stakeholders to explore possible improvements to the guidance on employee expenses, particularly on travel and subsistence, and the process for claiming tax relief on non-reimbursed expenses.
So work is ongoing to improve guidance and processes, but going back to the original question at the beginning of this article, we would be interested to know what mileage you or your employees claim for when attending business meetings.
Please take a moment to complete our one tick box poll which is situated to the right of this news item on our website .
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Will payroll software be able to deal with changes to Scottish income tax? 22 January 2018
We knew in November 2017 with the publication of a discussion paper ‘ The Role of Income Tax in Scotland’s Budget ’ that there was the possibility of a new tax regime in Scotland with up to six income tax bands. The Scottish draft budget was then published on 14 December 2017 with proposals to:
introduce a new 19p Starter Rate of tax; freeze the basic rate at 20p; introduce a new Intermediate Rate of 21p; and increase both the Higher Rate and Top Rate by 1p respectively.
One of our first thoughts after this announcement was will existing payroll software be able to cope with such a short timeframe as the changes are proposed to come in from April 2018. We put out a quick poll question on the back of this news through the CIPP website and after over 350 responses it became apparent that many people do not know if their software will cope (49%). If you fall into this category do watch out for your annual update from your software provider and make sure you take the time to read and digest the relevant details. Of the remaining respondents, 9% said that their software would not cope with the changes but encouragingly, 42% said that they knew that their software would. We have since spoken to our contacts within in the payroll software development industry and MHR legislation manager, Neil Tonks ChMCIPPDip, (who incidentally is one of our first members to achieve individual chartered status ), said: “For us, the additional Scottish tax bands aren’t really a problem – it’s just data like any other year except this time there’s a bit more of it. Our system is designed to deal with any number of tax bands so we didn’t have to do anything to cope with the additional ones. The only thing we had to make a software change for was the existence of the additional SD2 tax code which goes with the extra band which now exists above the basic rate band. We discovered that when we made the changes a couple of years back to cope with the concept of Scottish tax, we hadn’t allowed for the possibility that Scotland and the rest of the UK might have different numbers of D tax codes (there are 3 in Scotland next year but only 2 elsewhere), so we had to fix that, but it was no great problem as it only affected the screen validation that stops people entering invalid codes.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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