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Employee benefits and expenses

The Office of Tax Simplification (OTS) has issued its second report on employee expenses and benefits.  The issues on accommodation benefits and termination payments have been deferred to a future report.  The report’s recommendations include:

  •  Voluntary payrolling of benefits.
  •  Broadening PAYE settlement agreements to cover any tax liabilities on expense and benefits.
  •  An exemption for qualifying business expenses, to avoid the need for dispensations or for the employee having to declare the reimbursements on P11Ds and the employee claim a deduction.
  •  Introduce a trivial benefit limit.  Payments below this would be exempt.

On travel and subsistence:

  • Either provide that an employee can have only one permanent workplace, or redefine “permanent” and “temporary” workplaces;
  • Have a specific regime for homeworkers with a flat rate tax free allowance.

It will be interesting to see which of these are taken up.



Date: 27th February, 2014
Author: Cathy Corns


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