Policy News Journal - 2014-15

The report explains that this is the latest in an annual series, thus enabling readers to follow changing trends over the years. They are viewed as comprehensive,

 apart from information supplied late by employers, and  save for the important exception that payrolled benefits are not included. HMRC estimate that the taxable benefit value of these is approximately 5% of the total taxable value reported in the tables. Presumably this means that future issues of this report could become progressively less comprehensive if voluntary payrolling increases significantly following the recent consultation.

The 2012-13 figures (currently viewed as provisional) show that:

 the number of recipients of benefits in kind continued to remain relatively steady at 3.6 million in 2012-13, including 300,000 directors.  the total taxable value of all benefits in kind in has also continued relatively steady at £7.5 billion in 2012-13.  the number of recipients and total taxable value of excess mileage allowance payments decreased further in 2012-13 as a result of some employers reducing mileage payments to employees.  private medical and dental insurance was the most widely received benefit (by 62% of all those receiving any benefit), followed by cars (26%) and excess mileage.

Autumn Statement: What is the impact on flexible benefits and salary sacrifice?

5 December 2014

The Chancellor’s statement about countering “the avoidance of tax through special purpose share schemes, miscellaneous losses and payments of benefits in lieu of salary” has caused some commentators to worry about a possible attack on flexible benefit and salary sacrifice schemes. HMRC have provided us with some helpful reassurance.

HMRC have essentially given reassurance that the concern is only about reimbursed expenses included in a salary sacrifice scheme.

The HMRC clarification says that:

The reference to "payments of benefits in lieu of salary" referred to the announcement that tax relief will not be available in future on reimbursed expenses that are provided as part of a salary sacrifice scheme. This change is referenced in paragraphs 1.251 and 2.136 of the Autumn Statement document, reproduced below: "1.251 As part of its reform of the rules for employee benefits and expenses in response to recommendations by the Office of Tax Simplification, the government will stop tax relief from being claimed on reimbursed business expenses when they are paid in conjunction with a salary sacrifice scheme ." As announced at Budget 2014 the government will simplify the administration of employee benefits and expenses. From April 2015 the government will provide a statutory exemption for trivial benefits in kind costing less than £50. From April 2016, the government will remove the £8,500 threshold below which employees do not pay Income Tax on certain benefits in kind and replace it with new exemptions for carers and for ministers of religion. It will also exempt certain reimbursed expenses and introduce a statutory framework for voluntary payrolling. The new exemption for reimbursed expenses will not be available if used in conjunction with salary sacrifice. (Finance Bill 2015)" " 2.136 Simplification of the administration of employee benefits and expenses –

CIPP Policy News Journal

08/04/2015, Page 151 of 521

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