COMPLIANCE
Discussion In Mainpay, the company decided every assignment which the workers undertook under the umbrella contract was to be treated as one assignment which took them away from the normal (permanent) place of work. This meant, in turn, that the places visited to execute the assignment were temporary. Their travel to and from home to get to those locations, as well as any subsistence they claimed, was therefore (in Mainpay’s eyes) eligible for tax relief and could be reimbursed in full. HMRC came to the opposite conclusion and stated that, just because an overarching contract existed, didn’t mean each assignment was to be treated as a temporary workplace. In fact, it argued
each separate location was the new permanent workplace for that period, in accordance with guidance set out at EIM32125. The tribunal found for HMRC after conducting some in-depth reviews of the reality of the arrangements in place. Conclusion Ideally, employers and agents should consider the order in which the decision needs to be made aligns with Section 339(3) of ITEPA 2003. This means that if it’s questioned by HMRC, a record of the thought process and reasonable care taken to make the right decision can be demonstrated. HMRC conducts many settlements on this basis alone each year. n
rule, you must consider the following additional rules: l the 24 month rule, see EIM32080 l the fixed term appointment rule, see EIM32125 l the depots and bases rule, see EIM32160 l the area rule, see EIM32190. These rules can only apply if the workplace is capable of being a temporary workplace by reference to Section 339(3).” Note that a temporary workplace can become a permanent workplace if any of the above rules are met. Therefore, the position needs to be monitored regularly in case any changes occur to the working arrangements.
Links corner ( listed in order of appearance within article ) Mainpay case: http://ow.ly/vJjG50NFUTS Section 338 ITEPA 2003: http://ow.ly/cxYE50NFV45 Section 339 ITEPA 2003: http://ow.ly/r1LA50NFVak Section 65 ITEPA 2003: http://ow.ly/5EWV50NFVlR Section 36 Tax Management Act 1970: http://ow.ly/fsX150NFVrW Section 118 Tax Management Act 1970: http://ow.ly/ySLP50NFVwH Section 44 ITEPA 2003: http://ow.ly/nVfV50NFVEu
Section 45 ITEPA 2003: http://ow.ly/wAVZ50NFVI9 Section 4 ITEPA 2003: http://ow.ly/M4Xp50NFVMR
EIM32065: http://ow.ly/uKUj50NFWMh EIM32150: http://ow.ly/Ol4j50NFXBn EIM32080: http://ow.ly/rGsp50NFXrC EIM32125: http://ow.ly/Oa7I50NFUn4 EIM32160: http://ow.ly/YqrK50NFXVH EIM32190: http://ow.ly/RpSB50NFXYn.
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| Professional in Payroll, Pensions and Reward |
Issue 90 | May 2023
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