The Government has opened a broad consultation programme on simplifying tax as it applies to employee benefits and expenses.

On 29 January 2014, the Office of Tax Simplification published its second report on employee benefits and expenses. It concluded that the tax rules and administration in this area could be simplified to ease the burden on employers, and encouraged HMRC to take a more proactive approach, producing live and current guidance, rather than merely adopting a passive, checking and controlling stance.

At Budget 2014, the Government published its response, outlining the areas it would consult on, and announcing a call for evidence on remuneration packages.

On 18 June 2014, five consultations were published, to look at:

  • Abolishing the £8,500 threshold for lower paid employment – at present certain employees earning below that threshold are not liable to income tax on certain non-cash benefits (BiKs). To access this consultation click here
  • Trivial benefits exemption – the Government believes that a clear and simple statutory exemption will make administering trivial (ie low cost) BiKs substantially easier for employers. To access this consultation click here
  • Voluntary payrolling – this proposal would introduce a voluntary system of payrolling for BiKs, instead of submitting forms P11D. This could, the Government considers, offer substantial administrative savings for some employers. To access this consultation click here
  • Exemption for paid or reimbursed expenses – this proposal looks to replace the current system of dispensations for reporting non-taxable expenses with an exemption for expenses paid or reimbursed by employers. To access this consultation click here
  • Remuneration practices in the 21st century – this consultation seeks information on the “wider picture” surrounding remuneration. To access this consultation click here

The consultations all close on 9 September 2014.