The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
CIPP survey: Simplifying tax and NICs treatment of termination payments 6 September 2016
The CIPP Policy team has created a short survey on the draft legislation which makes changes to the taxation of termination payments. Please help inform our response by completing the survey; it should only take 10 minutes of your time.
In July 2015, the government published a consultation on the tax and National Insurance contributions (NICs) treatment of termination payments to which the CIPP responded on behalf of its members.
The government has several objectives for the tax and NICs rules on termination payments: the tax system should continue to provide support to those who lose their job; the rules should provide certainty for employees and employers; the rules should be simple; the complexity that the Office of Tax Simplification (OTS) highlighted in their report should be taken into consideration; and the rules should be fair and not open to abuse or manipulation. The rules governing the taxation of termination payments are complex and can encourage manipulation by employers to take advantage of the employer NICs exemption. This is because employers can, in some circumstances, change the nature of some payments so that they become termination payments, including remuneration such as bonuses which would normally be subject to tax and NICs.
To meet these objectives, the government announced at Budget 2016 that it would make changes to the taxation of termination payments.
The draft legislation to support these changes has been published and the government is now consulting on the technical aspects of that legislation.
Based on the consultation document, the CIPP Policy team has created a short survey which closes on 26 September and should take around 10 minutes to complete.
We would be grateful if you could spare the time to complete our survey , but you may find it helpful to read the draft legislation first which can be found at Annex A of the consultation document.
CIPP survey: Alignment of dates for ‘making good’ on benefits-in-kind 7 September 2016
The CIPP Policy team has created a short survey on proposals to align the ‘making good’ rules for BiKs with those where the employer accounts for the BiK in real time through PAYE. Please help inform our response by completing the survey; it should only take 10 minutes of your time. The Office of Tax Simplification, employers and representative bodies have made it clear to the government that there are problems with the existing rules for employees ‘making good’ the value of the benefits-in-kind they receive from their employers. They have highlighted that for some benefits-in-kind there are a number of different dates set out in legislation and in HMRC guidance.
Additionally, for some benefits-in-kind they have highlighted the practical difficulties of complying with the dates in legislation, which has to a large part led to the inconsistencies with HMRC guidance.
The recent introduction of new dates for making good on benefits-in-kind where the employer accounts for the benefit- in-kind in real time through PAYE (payrolling) has highlighted the lack of consistency and potential for confusion. The government has now issued a consultation document exploring the scope for aligning the making good rules for benefits-in-kind with those where the employer accounts for the benefit-in-kind in real time through PAYE.
The CIPP has created a survey to collect your views to enable us to respond to this consultation document. The survey should take around 10 minutes to complete and will close on 26 September 2016.
cipp.org.uk
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