Reward insight
will increase the tax charges for officers where general private use is permitted, we believe HMRC has taken a considered approach in respect of a permanent legislative change which has also been made to the EV exemption (section 248A, Income Tax (Earnings and Pensions) Act 2003). Prior to this, permitted use of the EV within the exemption included ordinary commuting when on call and other private journeys when on call (freedom of movement). HMRC changed the definition to exclude the on-call requirement such that any ordinary commuting fell within the exemption, regardless of whether an officer was on call. This change is permanent and makes the exemption more practical for all affected employers. HMRC could, justifiably, consider that there is now a real choice when considering how to provide the vehicles needed for call-out and emergency use. Either an EV is provided with certain private use prohibited when not on call (other than commuting), or a vehicle is provided for business use but with no restrictions on its use. In the former case, no tax or reporting obligations arise,
whereas, in the latter case, there will be a benefit in kind based on the full costs and without any reduction for the business use. It should be noted here that the ‘company car’ rules do not give relief for any business use either. ...consider as soon as possible whether to change policies Even before the TRs end there is a case for introducing the option of section 248A exempt use. After all, officers undertaking commuting and/or freedom of movement journeys are already paying tax on such use, including any fuel costs met by the employer. When we get to April 2020, that case becomes much stronger. With only a few months to the end of the TRs, employers need to consider as soon as possible whether to change policies. Officers using vehicles will reasonably expect a period of notice from their employer if their personal
tax liability for use of an EV is likely to increase. Above all, the important work of the emergency services can’t be put in jeopardy by misunderstandings or miscommunication. After the changes to the UoA legislation in April 2017 we advised several employers on how their policies could be revised; many took the opportunity to apply the EV exemption, restricting private use to that allowed under the legislation. Some established this as their default position and are no longer affected. Others introduced this as an option alongside unrestricted use of assets with the option exercised at the date of the vehicle renewal. There is a third category of employer that has resisted, so far, the move to section 248A. For these the amendment so that ordinary commuting is now permitted within the exemption should be viewed as HMRC’s way of encouraging its widest application. As most private mileage is now covered by the exemption, it is clearly a sensible option that employers should consider implementing before 6 April 2020. n those overarching principles l good data to provide evidence-based conclusions for your recommendations; but equally to use a mix of research methods i.e. workshops and surveys that provide a range of evidence that is both qualitative and quantitative l the growing value of technology in data analytics. Narrative and communication was repeated again as critical when it came to successful gender pay gap reporting. Charles Cotton, senior adviser to the CIPD for performance management, who chaired the conference, said of the day: “today’s event has reinforced the importance of reward and payroll professionals helping their organisations to reflect on why they’re offering benefits in the first place, how best to communicate these and the various ways that their impact can be assessed.” n
Delivering employee benefits
SamanthaMann CIPPMAATMCIPPDip, CIPP senior policy and research officer, provides a report of a recent CIPD event I t is not often that I get a chance to attend a one-day conference and just listen, but the opportunity to stand in for our and answered audience questions It was a good day, thought provoking, entertaining and, above all, informative.
editor with a ‘press pass’ was just too good to miss, particularly as it was to be hosted by the Chartered Institute of Personnel and Development (CIPD) on the subject of reward management. In November 2018, the CIPD published, in partnership with LCP, their fifteenth reward management survey (http://bit. ly/2UPnw3n) which explored: “benefits employers in the UK offer to whom and why; how benefits packages are provided; and how they are communicated and evaluated”. The conference further explored these themes with speakers from a broad range of global organisations in attendance to share their experiences through presentations or in expert panels that discussed specific themes
The report had identified that whilst benefits selection is important, so too is the administration of these benefits. As the day progressed common themes were identified, such as the importance of: l being able to tell a good story – to gain support for your plans l being clear about the principles of the business and matching reward solutions to ...Narrative and communication was repeated again as critical...
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| Professional in Payroll, Pensions and Reward |
Issue 51 | June 2019
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