I’d prefer the Government to simplify the tax system, focusing on key areas of business activity and income
VOLUNTEER HOTSEAT News and views from volunteers of the CIPD Northern Branch Network
HMRC has stated that employees who work from home part or all of the time can claim tax relief on the current level of Working From Home (WFH) allowance (£26 per month) at their marginal rate of tax (whatever the highest rate of tax they pay is). Therefore, a ‘basic rater’ would be able to claim 20% of £26 back (£5.20) from HMRC per month (or £62.40 per annum) with no need to provide receipts. We are working with HMRC to address how the WFH tax relief mechanism could be applied to future years, to account for myriad hybrid working arrangements, because it is not a certainty that the tax relief will be extended to future years at present. What additional support would you like to see the government implement to help employer businesses? Generally, I am not a fan of tax reliefs – they complicate the tax system and give money away, rather than bringing it in to fund things like pensions, local authorities and essential services. I’d prefer the Government to simplify the tax system, focusing on key areas of business activity and income (such as income tax, VAT and online trading). Some of the tax system is very archaic and is letting a lot of employer businesses down due to the ever- increasing admin burden. But there is currently an exercise ongoing to try to tackle this – let’s hope it makes the system much more fit for future purpose.
Justine Riccomini MCIPD is a volunteer member of the CIPD West Yorkshire Branch, which is split into three geographical groups (Bradford, Huddersfield and Leeds) and responsible for organising a programme of events and seminars for members on a variety of topics. As a tax specialist, Justine co-chairs three high- level strategic policy meetings with HMRC, covering employment and payroll, construction industry taxation and share schemes. In the Volunteer Hotseat, Justine explains more about tax compliance in the wake of the pandemic, for both employers and employees, and what support she’d most like to see the government introduce to help employer businesses thrive. What tax and HR compliance issues should employers currently be considering? HMRC is focusing on compliance of the Coronavirus Job Retention Scheme (CJRS) and is carrying out thousands of investigations to identify any fraudulent claims.
Therefore, it’s vitally important that employers are clear on what they claimed and that their claims were correct, so I would recommend they audit their claims in line with their RTI returns. A number of high-profile arrests have been made for organised CJRS fraud. HR must play an important role in making sure their employer gets it right. Remember that compliance of the National Minimum Wage hasn’t gone away either. HMRC reviews have been continuing to take place during covid, and employers cannot afford to take their eyes off the ball, especially with the advent of a Single Enforcement Body. Can employees who work from home claim tax relief? Some employees will be receiving a tax and National Insurance contributions (NICs)-free payment from their employer of £26 per month if they work from home, as a contractual entitlement.
Justine Riccomini MCIPD of the CIPD West Yorkshire Branch is Head of Taxation at ICAS, where she heads up all matters relating to employment and devolved taxes policy. She is also a Policy Lead for the CIPD Northern Policy Forum.
Find out more about the CIPD West Yorkshire Branch and its upcoming events here
However, in respect of those employees who are not in receipt of this allowance, for 20/21 and 21/22 tax years,
REGIONAL INSIGHTS
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Autumn 2021
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