The Office of Tax Simplification (OTS) has published its third and final report on ‘Review of employee benefits’. Whilst the report focuses on two main areas, living accommodation benefits and termination payments, it does contain an update on other issues and ‘quick wins’ that the OTS discussed in their August 2013 interim report.
The earnings threshold for employees at which point expenses and benefits-in-kind become taxable is the subject of a current consultation.
Currently, the rules surrounding training are confusing and perceived as unfair.
Work related training is not taxable if contracted by the employer or if paid for by the employee and reimbursed by the employer. However, if the employee meets the cost but is not reimbursed, then it is not tax deductible. This has led to the following questions being raised:
The OTS believe that the whole area of training expenses needs to be reviewed and that extending the exemption, as well as simplifying the tax system, could have the added benefit of encouraging people to ‘up-skill’.
The interim report recommended 43 changes that could be implemented quickly and would benefit businesses and individuals alike in the short term. By the end of January 2014, HMRC had effected 13 of those, including:
Another ‘win’ originally scheduled for 2017 has also been achieved.
HMRC currently have 10 ‘quick wins’ under consideration with a view to implementation by May 2015. Some of those are:
By April 2017 it is hoped that 9 more ‘quick wins’ can be achieved. Some of these include:
The remaining 10 ‘quick wins’ will be taken forward by other routes.