CIOT welcome Government moves to
simplify and update approach on employee expenses
THE Chartered Institute of Taxation has
welcomed moves to simplify the Taxation of employee business expenses. The CIOT
argues that the system for exempting from Tax employees' employment expenses and
certain employer provided:- 'benefits' needs to be simplified if it is to
keep pace with changes in the labour market and the move away from 'traditional'
► Self funded training... Commenting on Government plans to consult on extending the scope of Tax relief
currently available to employees and the self employed for work related training
costs, Colin Ben Nathan, Chair of the CIOT Employment Taxes Sub Committee,
said:- "We welcome the Government's announcement to consult in this area.
Currently, the work-related training rules provide Tax relief only where the
employee is reimbursed or the employer contracts directly for the training, but
not where the employee incurs an expense that is not reimbursed. This does not
seem fair when employees are increasingly encouraged by their employer to
retrain, develop new skills, dual qualify, etc at the employee's own expense."
► Subsistence benchmark scale rates...
To reduce the burden on employers, from April 2019 they will no longer be
required to check receipts when reimbursing employees for subsistence using
benchmark scale rates. Colin Ben Nathan commented:- "Employer
reimbursements at flat rates and benchmark scale rates are intended as an
administrative easement but the existing requirement that employees provide
receipts for often very small amounts, eg. meals whilst working away from the
normal workplace, adds unnecessary bureaucracy to a system aimed at simplifying
the reimbursement of expenses incurred. The removal of the requirement to check
receipts will undoubtedly reduce costs for employers and we welcome this move."
► Guidance and claims process for employee expenses...
Commenting on HMRC plans to work with external stakeholders to improve the
guidance on employee expenses, particularly on travel and subsistence and the
process for claiming Tax relief on non reimbursed employment expenses, Colin
Ben Nathan said:- "A simpler process for employees to claim Tax relief for
their expenses is something which we recommended when contributing to the
Government's call for evidence. Employees need easier access to guidance around
what employment expenses they can claim Tax relief on, and how. Better
information is also needed for employees, and employers, around record keeping
requirements, and 'proof of entitlement', so that it is easier for employees to
claim a Tax deduction for eligible expenses and for employers on what amounts
can be reimbursed Tax free."
► Benefits in kind: electric vehicles... Commenting on the news that, from April 2018, there will be no benefit in kind
charge on electricity that employers provide to charge employees' electric
vehicles, Colin Ben Nathan said:- "If an employer provides electricity to
an employee to charge their own car, a benefit in kind arises based on the cost
of the electricity used for private mileage, but there is no clear guidance on
how to calculate the cost of electricity and it is therefore necessary to
estimate the cost.
Exempting the provision of workplace electricity will remove a significant
administrative burden in calculating what is often a relatively small sum."