London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

Need for reform on taxation of accommodation benefits and termination payments

The Office of Tax Simplification (OTS) is calling for a major review of the tax position on accommodation benefits and termination payments.  The current rules are complex and can be unfair.

The rules on accommodation benefits are “inconsistent and difficult to apply”.  Actually calculating the tax charge is difficult and the rules are outdated, often relying on 1973 rateable values and a £75,000 value for expensive (!) properties.

The OTS report proposes taking the most basic accommodation out of the charge to tax and calls for reform of existing exemptions.  A better way to assess any benefit could be to use market rental.

On termination payments, most people assume that any payment is tax free up to £30,000, which is not always the case.  The OTS wants to link the exemption to statutory redundancy payments.

The report also flags up other issues including the need to increase the amount of tax-free removal expenses; the requirement to reform the tax rules round long service awards; and tackling authorised mileage allowance payment rates.

The full report is available here.

 

 

Date: 13th August, 2014
Author: Cathy Corns

SHARE THIS

Articles from this Author

Contact Business Service Partners

Choose from the drop down menu below to select a Partner to contact.

Tweet

Mercer & Hole’s @GudgionJa progress in @CelebJustDance - Not much longer to Waite now….. bit.ly/2gqZOZq @MKDonsSET

Mercer & Hole’s Michael Lapham impresses at the @MoneyMgmtMag Financial Planner Awards bit.ly/2yw3Ieetwitter.com/i/web/status/9…

Follow

LinkedIn

For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole

Click here to follow us on LinkedIn