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 –
Admin Burdens Advisory Board publishes its annual report to the XST
14 March 2014
The Administrative Burden Advisory Board (ABAB) has published its Annual Report to The Exchequer Secretary to the Treasury (XST), David Gauke.
This Annual Report details the work carried out over the last 12-24 months and also highlights the priority areas for the future. Not surprisingly Real Time Information (RTI) is listed, especially the challenge around the cost model. If you would like to make suggestions on what ABAB could consider going forward please submit them via their online portal or contact the CIPP’s Karen Thomson who is a member of this Board.
25 February 2014
CIPP Policy News Journal
08/04/2015, Page 37 of 521
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