Suppose than a UK employer pays for the working visa application for a potential new non-EU employee, or for the renewal of a visa for an existing non-EU employee. The cost to the employer is the visa application fee plus associated legal fees.
1. Does the payment of these costs constitute a taxable benefit for the employee?
2. Are these costs tax deductible for the employer?
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Jeffrey A
Replies (2)
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Yes; Yes
The work permit belongs to the employee, therefore the costs met by the employer would be treated as earned income of the employee. The normal deduction rules will apply, and it is unlikely that the cost of the permit is wholly exclusively and necessarily incured. The cost is attributable to the specific circumstances of that employee, and not by reason of that particular employment (not every employee needs a work permit - unless you have a unique situation along the lines of Taylor v Provan).
The expense is a cost of employment, therefore deductible by the employer.