The review of expenses and benefits – final report also provides an update on the quick wins and on some of the more minor issues that were originally set out in Chapter 8 of the OTS interim report . Accommodation benefit: the OTS recommends the most basic accommodation is taken out of the tax charge entirely, and that there should be a reform of the existing exemption tests with a definition based upon: Whether the employee is required to live in the accommodation to enable him/ her to protect buildings, people or assets. Whether the employee is regularly required to work outside normal working hours. Whether he/ she is required to live in the accommodation as a result of regulatory requirements.
The OTS also recommends that all accommodation is taxed on the basis of open market rental value, subject to review every five years.
Termination payments: the OTS recommend that when considering the current and complex rules surrounding the £30,000 threshold, that the simplest way forward is for income tax relief to be only available in circumstances where the employee qualifies for a statutory redundancy payment. Under this new relief, the OTS proposes that the level of the exemption would be a multiple of the statutory redundancy payment that the relevant individual is entitled to, or alternatively, a flat amount.
The OTS blog provides a useful summary of these and many other subjects in greater detail.
CIPP consultation response on trivial benefits
1 September 2014
The CIPP has now submitted its response to the HMRC consultation on the treatment of trivial benefits, part of the broader consultation exercise covering a number of expenses and benefits aspects. The response includes detailed answers to all of the questions raised in the HMRC document, and we are most grateful to members for the help they have given in informing this response.
CIPP response to the HMRC consultation on the exemption for paid or reimbursed expenses
1 September 2014
The CIPP has submitted its response to the HMRC consultation on the exemption for paid or reimbursed expenses. The exemption would remove the need to either apply for a dispensation or report such payments on a P11D. The research was conducted through an electronic online survey circulated to CIPP members to which there were 104 responses.
The key findings from the full response are:
CIPP members welcomed the proposed “models” of acceptable record keeping and checking processes and wouldn’t feel disadvantaged if their particular circumstances were not covered; using a salary sacrifice arrangement to pay expenses is not common practice; custom scale rates are not widely used, with only 10% of respondents having applied for them;
CIPP Policy News Journal
08/04/2015, Page 160 of 521
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