Government urged to do more to help workers who don’t get expenses reimbursed - LITRG Press Release

Published on 10 December 2014

Government changes are set to make it easier for employers who pay or reimburse their employees’ expenses, but campaigners for those on low incomes are disappointed that nothing is being done to help people whose employers do not reimburse expenses but who nevertheless incur qualifying costs.

Most employers reimburse deductible expenses, such as business travel and subsistence costs, to their employees. Some employers reduce their reporting burdens by completing a form for HMRC, known as a dispensation, while others report these reimbursements annually on ‘P11D’ forms. Draft legislation published today (which is set to appear in next year’s Finance Bill), would mean employers would no longer need to complete dispensations or P11D forms in respect of deductible expenses that they reimburse to employees. This will take effect from April 2016.

There are, however, employers who do not reimburse expenses to their employees. Among the sectors where this is common is the care and support sector, where employees are often not reimbursed for the cost of travelling between the homes of those they are caring for. The LITRG believes that it is essential for there to be a clear and simple process for claiming tax relief, for that process to be well-publicised and communicated, and for there to be clear guidance, to ensure that employees in this position can make accurate claims.

In addition, LITRG is concerned that this new exemption, while simplifying administration for many employers, does nothing to help employees whose qualifying costs are not reimbursed, and whose income is too low for them to claim tax relief.

Anthony Thomas, LITRG’s chairman, commented:

“We welcome the introduction of a statutory exemption for paid and reimbursed expenses, as we recognise that this should reduce burdens for small employers. In addition, it should make it simpler for employees with more than one employer, as the same exemption will apply to all employers.

“However, we are concerned for two categories of employee in particular. Firstly, those whose qualifying expenses are not reimbursed and who are able to claim tax relief, as their income is above the Personal Allowance. For this group, it is essential that the process for claiming tax relief is improved and that clear guidance is available. We would welcome the opportunity to provide assistance in devolving the necessary materials.

“Secondly, those employees whose qualifying expenses are not reimbursed and who are unable to claim tax relief, as their income is below the Personal Allowance. This can be a particular problem for travel and subsistence expenses. We call on the Government to look at this issue as a matter of urgency in relation to the ongoing Travel and Subsistence Review.”


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