2.35 The Government has considered the responses to the consultation carefully and has decided that as a first step car, car fuel, medical insurance and subscriptions such as gym membership will be included in the scheme. These benefits have a high degree of certainty about their cost at the start of a tax year, so naturally lend themselves to payrolling. They are also the most popular benefits provided to employees by employers. Once payrolling is established, the Government will consider how other benefits can be payrolled. 2.36 As noted, a voluntary scheme does involve practical issues – for example, adjusting employees’ PAYE tax codes in advance of opting out – that HMRC will continue to work on in advance of payrolling going live. 2.37 There are a number of detailed questions that HMRC will discuss further with stakeholders on the detail of how a scheme will be designed and operate effectively for employers and employees. These include: The extent to which in practice some employers would decide to payroll some, but not all, of the benefits proposed for payrolling; The extent to which in practice an employer would need to exclude certain employees from payrolling; How to avoid confusion for employees where an employer has discretion over the benefits it can choose to payroll and/ or might choose to exclude some employees; The payment of Class 1A NICs in real time. In a letter to the Office of Tax Simplification (OTS), the Government have accepted several of their recommendations for payroll, including a post-implementation review into RTI and consideration of the “on or before” rule. The letter from David Gauke MP, the Financial Secretary to the Treasury, ranges over most areas of taxation, and includes a number of new announcements concerning OTS proposals for simplifications in the payroll arena. These are tabulated on page 9 of the letter, and include: Agreement to consider harmonising tax and national insurance a far as possible A post-implementation review of real time information, and consideration of whether full “on or before” reporting is necessary Agreement to consider extending the remit of the short-term business visitor provision, and simplifying the national insurance application process for staff coming in from abroad Agreement to allow employers to authorise software providers or others to deal with HMRC on their payroll issues. Government accept further payroll simplification recommendations from the OTS 15 December 2014
We should stress that at present these are all proposals, and would need legislation before any such changes could come into force.
Travel and subsistence review
13 March 2015
The government review on the rules underlying the taxation of travel and subsistence expenses continues and the government has confirmed that further consultation will not commence until later in the year.
The government’s plan was to consult in two stages.
CIPP Policy News Journal
08/04/2015, Page 165 of 521
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