Summer Budget 2015- Employment Tax Issues

Summer Budget 2015- Employment Tax Issues

The Chancellor’s Budget on 8th July 2015 included the following measures/announcements in respect of Employment Taxation, which   will be of relevance to local authority employers and employees:

Councillors’ Travel Expenses

The date for the statutory exemption from Tax and National Insurance   for councillors’ home to work travel mileage expenses paid by their local   authority has now been set at 6th April 2016. This was   originally planned to take effect from April 2015, but has been deferred to   the later date. This will apply to journeys from a councillor’s home to their   permanent workplace unless the councillor lives more than 20 miles outside the local authority area.  However, we understand that, until the legislation   is introduced, payments made to councillors in respect of home to work travel   will continue to be governed by existing guidance/interpretation for Tax/NI  purposes. Therefore, as we have previously recommended, local authorities are   strongly advised to review their current procedures to determine the correct   position, whether or not this matter has been raised by HMRC as part of an Employer Compliance Review.

Salary Sacrifice Arrangements

Whilst no specific changes were announced in respect of salary sacrifice schemes used by local authorities, the Government has said it will   actively monitor these arrangements to assess the effect on the levels of Tax  and National Insurance saved as result of their use. Therefore, it is possible that changes may be made in future Budgets.

Payrolling Benefits

Further consultation will take place in respect of the voluntary   payrolling of all benefits in kind from 2016/17, with the exception of   accommodation, loans and vouchers/credit tokens. The proposed changes will mean that, if the employer wishes, Tax and National Insurance may be   accounted for via the payroll for most benefits rather than being reported on forms P11D.

Trivial Benefits in Kind – Statutory Exemption

It was originally intended   that a statutory exemption for trivial benefits in kind costing less than £50   would be introduced in April 2015, but this was delayed. The exemption has now been confirmed as being applicable from April 2016.

If you would like further information regarding these announcements – or on Employment Taxes generally – please contact our Employment Taxes Director, John Harling, on 07768 446381 or via e-mailjohn.harling@lavat.co.uk.