There are few proposals in the employment tax sphere in the Autumn Statement and even in relation to the proposals which have been announced, detail is lacking. In particular, HMRC's response to its consultation on changes to the tax treatment of termination payments has not been published.
The following snippets may however be of some interest.
The consultation paper on the tax treatment of termination payments which was issued in July 2015 stated that the Government expected to make an announcement in the Autumn Statement about which proposals it would take forward. However, the Autumn Statement is silent on this topic and it is not clear whether the Government is re-thinking its position altogether or merely deferring any changes.
Employment intermediaries and personal service companies
It had been rumoured that HMRC was going to announce a tightening-up of the rules which apply where individuals provide their services to an end-client through their personal service company. The suggestion was that consultants may be required to move onto a company's payroll if their work lasts more than one month.
However, the only announcement on employment intermediaries so far is that following consultation, relief for travel and subsistence for workers engaged through an employment intermediary, including a personal service company, will be restricted. Details are not given in the Autumn Statement but it is assumed that the proposals will be consistent with those in the consultation paper and will restrict tax relief for what is essentially home-to-work travel and related subsistence expenses.
The Government says that it is taking forward the majority of the recommendations put forward by the Office of Tax Simplification (OTS) for reducing complexity in the current system around employment status with different tests used for tax, employment and pensions auto-enrolment.
The proposals which the Government is taking forward include:
- establishing a cross-Government working group to consider the benefits and barriers to an agreed set of employment status principles and a statutory employment test
- improvements to the Employment Status Indicator tool with the possibility of the tool's results being binding on HMRC
- improved online guidance on employment status.
Employee share schemes simplification
Again without providing any details, there are to be a number of 'technical' changes to 'streamline and simplify' aspects of the rules for both non-tax-advantaged as well as tax-advantaged schemes. Reference is made to the position of internationally mobile employees but it is not clear whether the technical changes will be limited to such individuals.
Salary sacrifice arrangements
The Government says that it 'remains concerned' about the growth of salary sacrifice arrangements and is considering what action to take, if any. It intends to gather further evidence to inform its approach.
An apprenticeship levy is to be introduced to help fund apprenticeship schemes. The levy will be 0.5% of an employer's wage bill, although each employer will receive an allowance of £15,000 to offset against this such that the levy will only apply where the wage bill exceeds £3 million. The levy will apply from April 2017.