These comments from a software developer’s perspective are certainly encouraging for the payroll community. Neil went on to say that he hoped MHR’s experience will be mirrored with other developers. “It was always assumed that the number of tax bands in Scotland would diverge from the rest of the UK at some point so this ought to have been taken into account by everyone when Scottish tax was first introduced. The D code issue will be specific to MHR, probably, and others might have similar small changes to make but I’d not expect anyone to have huge difficulties.” The 20% rate for Scotland is still being classed as the basic rate despite a lower rate being introduced which is good given that there are various calculations operated around the basic rate; for example Relief at Source for pension contributions will be unaffected, as will the earnings assessment for Employer Supported Childcare (vouchers) as this is also based on the rUK rates and thresholds. However the changes will affect PAYE Settlement Agreements (PSA) calculations and record-keeping. If the Scottish Parliament ratify these proposals, employers and payroll departments may receive a few more queries when the first payslips go out but that tends to happen anyway with statutory changes. We are relying on the Scottish Parliament not to go with an alternative solution as they did last year with the 40% threshold. Neil’s own words about this are likely to echo those of the whole payroll software community:
“…if that happens, we’ll just have to deal with it and get an update out to the customers!”
The onus is on HMRC to ensure the timely and accurate issue of tax codes. Address maintenance is also key and this is solely down to the tax payer; they must ensure they are updating HMRC when they change address. According to a report by the NAO, maintaining accurate address records of the 2.6 million Scottish taxpayers remains the biggest risk facing HMRC in ensuring that Scottish income tax is assessed and collected properly.
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Taxation of employee expenses 27 February 2018
If your employee has a meeting away from their normal workplace and they pass their workplace en route to the meeting, do they claim the mileage from home to the meeting or just from their workplace to the meeting?
This was the question we asked through our website quick poll during the second half of January and the first half of February. We received 956 responses in total: 77% said they claim from the workplace to the meeting, 21% said they claim from home to the meeting and the remaining 2% do not claim at all. Background HMRC’s policy used to be that if the employee passed their normal workplace to go to a meeting then they could only claim the business mileage from the workplace and not from home.
HMRC rules changed so that as long as the employee didn’t go into the workplace and do work en route to the meeting, (they can pick up work papers etc.) then the whole journey is viewed as business mileage.
An excerpt from the 490 Employee travel - tax and NICs guide for employers confirms this:
Passing work on the way to somewhere else 3.48
An employee may pass a permanent workplace on the way to or from a temporary workplace. If the employee stops and performs substantive duties at the permanent workplace then there are 2 journeys – ordinary commuting between home and the permanent workplace and a business journey between the permanent workplace and the temporary workplace. Tax relief will be available for the cost of the second of these journeys – but not the first. 3.49 Where the employee does not stop at the permanent workplace, or any stop is incidental to the business journey, all of the journey is business travel. Example Darren drives each day between his home in Southampton and his office in Winchester. One day he has to travel on business to Birmingham and back. He drives directly from home to Birmingham but stops off at his office to pick up some papers. His stop is incidental to his business journey. His business journey is from his home in Southampton to Birmingham and back. Tax relief is available for the cost of his journey from his home to Birmingham and back.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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