Published on 9 September 2014

Employee Benefits and Expenses – four consultation documents

Submissions

LITRG broadly welcomes the reforms proposed and explored in the four consultation documents concerning employee benefits and expenses and the fact that the Government and HMRC are looking at these issues simultaneously. In respect of all four consultations, we call on HMRC to undertake more work to explore the impact of the proposals on claimants on tax credits, Universal Credit and welfare benefits.

3 people sat around a desk, on the desk is various paperwork, stationary and electronic devices, in the centre of the desk is a chalkboard with the words 'EMPLOYEE BENEFITS' written on it in white chalk.
one photo / Shutterstock.com
  • trivial benefits exemption – a principles based statutory exemption for trivial benefits in kind should help to reduce costs and administration for employers and HMRC; more importantly, it should mean that employees do not face a tax charge on items that neither they nor their employers view as benefits in kind;
  • exemption for paid or reimbursed expenses – a statutory exemption for all employers who make expenses payments should provide the most scope for simplification. HMRC should also take the opportunity to iron out differences between expenses rules for relief and reimbursements;
  • abolition of the £8,500 threshold for lower paid employment and form P9D – LITRG acknowledge that the removal of the threshold would result in some simplification and would also remove an element of unfairness. We have highlighted a few groups of employees and employers that we think could be adversely affected by the abolition and make suggestions as to how to protect them;
  • real time collection of tax on benefits in kind and expenses through voluntary payrolling – we recognise the opportunity that voluntary payrolling presents for simplification for employers and HMRC. Nevertheless, it may be less beneficial for employees. We call on HMRC to provide clearer guidance both for employers and employees.

In respect of all four consultations, we call on HMRC to undertake more work to explore the impact of the proposals on claimants on tax credits, Universal Credit and welfare benefits.

To see the full LITRG responses please use the links below:

140908_LITRG-response_trivial-benefits-exemption_FINAL.pdf (385.39 KB)

 – trivial benefits exemption
 

140908_LITRG-response_expenses-exemption_FINAL.pdf (274.38 KB)

 – exemption for paid or reimbursed expenses
 

140908_LITRG-response_abolition-8500-threshold_FINAL.pdf (444.32 KB)

 – abolition of the £8,500 threshold for lower paid employment and form P9D
 

140908_LITRG-response_voluntary-payrolling_FINAL.pdf (422.77 KB)

 – real time collection of tax on benefits in kind and expenses through voluntary payrolling

Joanne Walker

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