Employment Tax updates
HMRC's advisory fuel only mileage rates
HMRC recently changed with effect from 1 March 2015 and the new rates are as follows:
Petrol LPG
1400 cc or less 11p 8p
1401 to 2000 cc 13p 10p
over 2000 cc 20p 14p
Diesel
1600 cc or less 9p
1601 to 2000 cc 11p
over 2000 cc 14p
Important: Please ensure that your employee expense policy reflects these changes and that your employees, particularly those that receive a company car but no private fuel benefit, are aware of these changes. If the employees claim a mileage in excess of these rates it could inadvertantly trigger a fuel scale charge resulting in an unexpected tax and Class 1A NIC liability (and penalties) for the employer, which could be quite costly!
Office of Tax Simplification (OTS) report - update
Following the draft Finance Bill 2015, the Government has proposed the following key changes to the taxation of expenses and benefits:
- Abolition of the £8,500 threshold for lower paid employment and form P9D from 6 April 2016.
- Trivial benefits exemption - statutory limit of £50 introduced from 6 April 2015 (subject to certain other conditions being met).
- Exemption for paid or reimbursed expenses to be introduced from 6 April 2016 which means that those items will not need to be agreed in a dispensation or included on a form P11D.
- Voluntary payrolling of benefits in kind and expenses from 6 April 2016
- Company cars/vans benefit and fuel scale charge - changes being proposed to rates used to calculate the taxable BIK for Co cars/vans from 6 April 2016. Changes are also proposed to the 'multiplier' used to calculate fuel benefit, which is likely to be higher than previous years.
- Employment status - recommendations have been made to help employer's in deciding whether an individual should be treated as an employee or self-employed.
If you would like to discuss the impact of any of the above updates, please contact us.
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