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Published on 31 August 2015

Draft legislation: review of employee benefits and expenses

LITRG has responded to an HMRC consultation document on draft legislation in respect of their review of employee benefits and expenses. These draft regulations continue the work to implement the proposals originally put forward in 2014, which themselves followed a review by the Office of Tax Simplification (OTS).

LITRG notes a few concerns with the drafting of the regulations, in particular where we think confusion might arise for employees and/or employers. We have also spotted several typographical errors and areas where we think clear guidance will be essential, for example, concerning the type of evidence that will be needed when employers make reasonable assumptions in respect of payrolling. We also raise a concern that the definition of an authorised employer might be unduly onerous, particular for those employers with less stable workforces

We have previously called for employee benefits and expenses to be considered holistically and we are pleased to see that HMRC have taken forward the work of the OTS. These four sets of regulations are intended to deliver the detail of some of the changes. In particular, they are concerned with the reforms which abolish the £8,500 threshold for benefits in kind, allow employers to use voluntary payrolling to report and deduct tax on benefits in kind, and introduce an exemption for qualifying business expenses.

The draft legislation is available on GOV.UK:

The LITRG response can be found here.

Joanne Walker

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