Competitiveness of UK tax administration
The government has accepted and will further consider 51 of the 58 recommendations made by the OTS. The government has commenced work on many of these, with details to be published in due course.
Simplification of the administration of employee benefits and expenses
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.
Improving the operation of the Construction Industry Scheme (CIS)
Following consultation, the government will implement a package of improvements to the CIS to reduce administrative burdens on construction businesses. A summary of responses will be published shortly.
Travel and subsistence review
At Budget 2014 the government announced a review of the rules for tax relief on travel and subsistence payments, in response to the OTS’s review on employee benefits and expenses. The government has undertaken the initial stages of this review and continues to take this work forward towards a full public consultation on the framework for new rules. CIPP comment The policy team welcomes the news the government have committed to simplifying the administration of benefits and expenses. We had hoped the trivial benefit amount would be higher and around the £75 mark, but £50 will do. It also appears on first reading there will not be the previously mooted requirement to have annual checks, or rather a limit on how many £50 can be had; so good news there. We are pleased to see there will be some exemptions for carers in respect of the £8,500 limit. Exempting certain reimbursed expenses, we hope will reduce the burden on employers and at last, we see in print payrolling is going to happen, albeit on a voluntary basis. The CIPP as you would expect has been and will continue to be involved in all this consultation work. Personal allowances, rates of tax and National Insurance contributions for 2015-16 Having announced in Budget 2014 that the basic personal allowance for those born after 5 April 1948 would rise from £10,000 to £10,500 on 6 April 2015, today the Chancellor announced that this allowance rises to £10,600 instead. This means that the threshold for those born between 6 April 1938 and 5 April 1948, which is currently £10,500, increases to £10,600 to match, and the new Transferable Tax Allowance for married couples and civil partners will begin at £1,060. The basic rate limit changes to £31,785, making the higher rate threshold £42,385 (basic rate limit plus basic personal allowance). The rates of tax will remain at their 2014-15 levels. National Insurance contribution rates are unchanged for 2015-16 but all the thresholds and limits increase. The Class 1 Upper Earnings Limit (UEL) and the Class 4 Upper Profits Limit for NICs will continue to be aligned with the point at which higher rate tax becomes payable: £42,385. We look forward to learning whether the simplification for CIS and T&S will become a reality and again the policy team are in involved with this work.
CIPP Policy News Journal
08/04/2015, Page 33 of 521
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