The Office of Tax Simplification (OTS) has published a paper that prioritises its list of the 43 ‘quick wins’ around changes to the tax system in relation to benefits and expenses.
The paper covers areas such as fleet management, bikes-for-work schemes and long-service awards.
HM Revenue and Customs (HMRC) has undertaken an initial review of OTS’ ‘quick win’ proposals, which were included in its Interim report on employee benefits and expenses, published in August 2013, and has provided feedback on the extent to which each of these can be implemented quickly and effectively.
The OTS’ prioritised list takes into account HMRC’s comments, along with responses from its consultative committee, stakeholders and industry bodies, such as the Chartered Institute of Payroll Professionals and the Association of Accounting Technicians.
In categorising the ‘quick wins’, the paper has divided these into those already implemented, those that should be implemented as soon as possible and those that will require further work before they can be put into effect.
The ‘quick wins’ that have already been implemented include:
- The ability for P11D and P11D(b) to be submitted online.
- The provisions for the reimbursement of car fuel where the employee contributes by 6 July 2013.
- Providing new employers with a link to the relevant sections of HMRC’s website when they first register in order to raise awareness of the employee benefits and expenses issues that may be relevant to their business.
The ‘quick wins’ that should be implemented in the short term include:
- Voluntary payrolling of benefits in place of reporting benefits on P11D forms.
- HMRC to publish a list of benefits that it considers to be trivial, presumably with limits on the amounts.
- HMRC to better publicise the guidance that it has available in relation to employee benefits and expenses, and improve the access and automatic links to relevant information, in order to raise awareness and understanding for both employers and employees.
The ‘quick wins’ that it will be considering further with a view to implement include:
- The alignment of tax and national insurance contributions (NICs) treatment of mileage rates over 45p.
The ‘quick wins’ that it will be considering as part of its review of HMRC administration include:
- Improving communication between HMRC officers dealing with employers and employees.
- Employers being permitted to sort out straightforward employee tax issues with HMRC if the employee gives consent.
- Allowing voluntary notification of in-year changes to benefits.
The ‘quick wins’ that it will be considering as part of its review on ‘big -picture’ issues include:
- Ensuring that car fuel benefit is based upon what an individual puts in the tank, not how they pay for it.
- Aligning tax and NICs mileage rates over 45p.
The ‘quick wins’ that will be taken forward by other routes include:
- Allowing car fleet operators to buy multi-year road fund licenses. This is being passed on to the Driver and Vehicle Licensing Agency (DVLA).
- Exempting electricity for electric cars from the benefit rules. OTS does not think this would currently affect many people.
- Carrying out a proper evaluation of bikes-for-work schemes’ successes, and looking at ways to streamline its administration. This is something for the government to consider as part of its evaluation of tax policy changes.
- Bringing the minimum length of service down to five years for long-service awards, and allowing the exemption to apply if there has been a previous award unless that was within five years. This would be swept up by a review of ‘trivial’ benefits.