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Review of the tax position on travel and subsistence

The government has responded to the Office of Tax Simplification’s report on the tax treatment of reimbursed employee travel and subsistence expenses. 

The government has now launched the first stage of its review.  It acknowledges that there are issues with the tax rules on travel and subsistence expenses; they have not kept pace with changes in working practices, e.g. temporary labour and working from home.

The government wants any new set of rules to be simple to understand and use; to reflect commercial decisions; and also to be responsive to current working patterns.  However, there is no intention to provide tax relief for commuting.

The government intends to conduct the consultation in stages:

Stage 1 – July 2014 to October 2014

The government wants to improve its understanding of the commercial realities of travel and subsistence payments.  Amongst other issues, the government intends to explore the circumstances in which travel and subsistence expenses are paid; how tax influences the position and the other factors that influence commercial decision making.

The government also intends to discuss the framework for any new principles on travel and subsistence expenses.  In particular the government wants to look at what sort of payments should qualify for tax relief, by whom they should be paid, to whom and how they should be paid.

The government intends to report on this stage of the review in the 2014 Autumn Statement.

Stage 2 – Winter 2014 and Spring 2015

In the second stage the government plans to establish a working group to help in producing a new set of principles upon which the rules of a new travel and subsistence regime can be based.

The government intends to report on this at the 2015 Budget.



Date: 14th August, 2014
Author: Cathy Corns


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