Government to publish call for evidence on employee expenses

Spring Budget 2017: The government is to publish a call for evidence to better understand the use of income tax relief for employees’ expenses.

The call for evidence, which was first announced in the Autumn Statement 2016, was reiterated in the Spring Budget 2017 policy paper.

The call for evidence will also include employees’ expenses that are not reimbursed by their employer.

The call for evidence forms part of the government’s wider aim to ensure that the tax system for different types of employee remuneration is fair and coherent.

Mark Groom, tax partner at Deloitte, said: “The announcement hints that HMRC [HM Revenue and Customs] may be concerned by expenses which are not reimbursed by their employers. In such cases, employees have to claim relief directly from HMRC under self-assessment.

“There are many examples of perfectly legitimate business expenses which employers may not reimburse [for example] professional subscriptions and travel to and between sites in the construction industry.

“In addition, when employees use their private vehicles on business, they can claim tax relief on up to 45 pence per mile, if not reimbursed by their employer.

“It’s early days yet, but if there is a concern with expense claims, with the advent of tax digitalisation, this could be tackled by requiring employees to upload evidence through their personal tax account to substantiate claims for tax relief.

“The call for evidence will be published later this month.”