Payroll insight
employer in respect of journeys to those locations will be subject to tax/NICs. It is possible that an employee will be asked to attend a second workplace for a period of limited duration, which, under HMRC rules, is a period not exceeding 24 months. In such cases the expenses met in travelling to that second workplace may qualify as allowable for tax/NICs purposes. The rules can be complex so great care must be taken to ensure that they are followed correctly after organisational changes have taken place. Policies should be updated accordingly to reflect the changes in circumstances, so that employees understand what expenses may be claimed and in what circumstances. Employee benefits Organisational changes often result in employees from the bodies being brought together receiving different benefits, including salary sacrifice arrangements. A newly formed organisation is likely to want to be able to offer the same benefits to all its employees, but it is not always possible to do this from day one for reasons of cost and administration. This
can be an issue where certain benefits have tax-favoured status (e.g. childcare vouchers and cycle to work), where the exemption from tax/NICs is predicated on the benefit being available to all employees. ...take advice and flag these issues with HMRC In such cases it is important to take advice and flag these issues with HMRC at the earliest opportunity to establish if it is acceptable to continue to provide the benefits on different terms for a limited period. Whilst it cannot be guaranteed that HMRC will agree to such a request, it is likely to be viewed a lot more sympathetically than not flagging the issue and it being discovered by HMRC at a later date. at the earliest opportunity...
consider from an employment taxes perspective which will need to be addressed where organisational change takes place including the following. ● Consideration of the tax/NICs rules regarding termination payments where redundancies are required, including the new post-employment notice pay rules from April 2018. From April 2020, there will also be a charge to employer’s NICs on termination payments over £30,000 (where the relevant tax exemption applies). ● Operation of the construction industry scheme, which may have to apply for the first time in some cases. ● Responsibility for administration of the pension schemes. Final observations Organisational changes present many challenges and it is important to address these key employment tax issues to ensure that all HMRC requirements are fully met. This should be done as soon as possible in the process and advice should be taken where appropriate to avoid any unwelcome problems further down the line. n
Other areas There are a number of other issues to
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| Professional in Payroll, Pensions and Reward |
Issue 47 | February 2019
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