Flexible Benefits

OTS recommendations – a whole new ball game, or tinkering with the rules?

Posted by David on February 19, 2014
Expenses and benefits, Flexible Benefits, HMRC, National Insurance, News articles, Payroll / Comments Off on OTS recommendations – a whole new ball game, or tinkering with the rules?

At the end of last month the Office of Tax Simplification (OTS) published its eagerly anticipated Second Report into the tax treatment of Employee Benefits and Expenses.

Not everyone will wish to read all 86 pages of the Report, therefore we have produced a summarised version, together with some of ET4B’s own observations, in this attached document. However the fundamental questions addressed boil down to two things; can interpretation and administration of the rules be made any simpler, and can HMRC do more to help employers in their (sometimes reluctant) role as informal ‘tax assessor and collector’.

Amongst some fairly significant changes proposed by the OTS, the main ones are as follows:

– HMRC should actively encourage employers to voluntarily payroll benefits.
– There should be a legislative P11D exemption for benefits which have been fully taxed and NIC’d via payroll.
– The scope of PAYE Settlement Agreements (PSAs) should be widened. In addition, an online PSA return completion process should be introduced, and the current need for employers to ‘apply’ for a PSA should be abolished completely.
– There should be a clearer definition of certain benefits.
Dispensations to be replaced by a statutory exemption.
– Abolition of the £8,500 ‘higher paid’ P11D threshold.
– Simplification of Travel and Subsistence and other expenses deduction rules.
– Simplification of NICs generally.

Substantial changes may not happen overnight and so employers must continue to meet their existing ongoing obligations. At ET4B we pride ourselves in being able to abbreviate these complex matters significantly, translating these into plain English and simple guidelines, whilst of course keeping a close eye on possible future changes. If you feel ET4B can assist your own organisation in this rapidly changing environment please do not hesitate to contact us.

Tags: , , , , , , , ,

Tax breaks when looking after employees’ health

Posted by David on December 18, 2013
Expenses and benefits, Flexible Benefits, News articles / Comments Off on Tax breaks when looking after employees’ health

Earlier this year the government opened consultations on providing a new tax exemption for employer costs incurred in helping staff return to work. This is intended to tie in with the new ‘health and work assessment and advisory service’ due to be created next year, whose main ‘intervention’ focus will be to ensure that employees off sick are able to return to work as soon as possible.

The initial suggestions, that the tax relief should have a £500 maximum and should only apply if the employer agrees to fund all such ‘interventions’, has attracted some criticism. However it is worth remembering that a significant proportion of staff medical or welfare costs may already be met by employers, without incurring tax or NIC charges. This article provides a brief summary. Please contact the ET4B team if you require additional information.

Tags: , ,

Tax free childcare – government consults on changes

Posted by David on August 19, 2013
Expenses and benefits, Flexible Benefits, News articles / Comments Off on Tax free childcare – government consults on changes

As announced in Budget 2013, the government proposes to materially revise the ‘tax free employer-supported childcare’ regime. The proposals, potentially to be phased in from Autumn 2015 would (over time) replace the existing system of tax reliefs where childcare is provided externally and funded (at least contributed in part) by an employer.

Its headline numbers suggest the new scheme will pay for 20% of up to £6,000 of childcare costs annually for each qualifying child. However employers may wish to contribute to the joint HM Treasury and HM Revenue & Customs recently announced consultation, e.g. to seek to ensure the new system does not suffer from over-complexity (for instance the Budget announcement indicated that it may be possible to elect to stay within the ‘old’ scheme). In addition the tax reliefs currently achieved by many key employees may be affected.

Some interesting observations include:

– It is understood that there are no current plans to abolish the existing (and potentially unlimited) tax relief available for employers who provide and/or manage their own workplace nurseries.

– The current ‘Working Tax Credit’ system will be changed under the new ‘Universal Credit’ regime, bringing some further complications in the interaction with ‘Tax-Free Childcare’ .

– The consultation is introduced with significant political overtones (e.g. “The Government is proud that – despite inheriting Britain’s largest post-war budget deficit from the previous Government – it is possible to take these vital steps to keep costs down for working families”) which are not normally a feature of HMT or HMRC consultations. Does this indicate some concerns over possible opposition which may be generated by the proposals now that these are open to wider public scrutiny?

 

Tags: ,

ET4Bs Autumn 2012 Newsletter

Posted by David on November 15, 2012
CIS, Expenses and benefits, Flexible Benefits, National Insurance, News articles, Payroll, Status / Comments Off on ET4Bs Autumn 2012 Newsletter

017_ET4B Autumn 2012 Newsletter

This Newsletter contains details of recent employment status and IR35 issues, an RTI update, and information on other topical employment tax matters

Tags: , , , , , , , , , ,

ET4Bs Spring 2011 Newsletter and Budget update

Posted by David on May 01, 2011
Expenses and benefits, Flexible Benefits, HMRC, National Insurance, News articles, Payroll, Termination Payments / Comments Off on ET4Bs Spring 2011 Newsletter and Budget update

014_ET4B Spring 2011 Newsletter_Budget update

This Newsletter provides topical details of recently new and updated rules, including details of HMRC’s attempts to prevent ‘disguised remuneration’, its rather confused thinking on childcare tax reliefs, and the pension tax relief limitations.

Tags: , , , , , , , , , ,

ET4B’s Spring 2010 Newsletter and Budget update

Posted by David on March 31, 2010
Expenses and benefits, Flexible Benefits, News articles, Payroll / Comments Off on ET4B’s Spring 2010 Newsletter and Budget update

12C_March 2010 Newsletter Budget update