Employee benefits and expenses ripe for overhaul | AccountingWEB

Employee benefits and expenses ripe for overhaul

Have you ever thought that the administration of expenses and benefits could be improved or simplified, asks Diana Bruce of the CIPP.

The Office of Tax Simplification (OTS) certainly thinks so and in August they published an interim report which concluded the no surprise news that the complex system for reporting and taxing employee benefits and expenses is ripe for a complete overhaul”. The OTS gathered feedback from hundreds of people at more than 50 events around the country to find out the issues with the current system. The review is looking to simplify benefits and expenses for four million employees and 300,000 employers.

The report identified some ‘big picture’ issues for further study such as ‘payrolling’ of benefits, abolishing the £8,500 ‘higher paid’ threshold, and smoothing the differences between tax and national insurance rules. The report also lists more than 40 items for possible ‘quick win’ simplifications.

The Chartered Institute of Payroll Professionals (CIPP) and the Association of Accounting Technicians (AAT) have been...

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  • Quick wins
  • When is a benefit really a benefit?
  • Payrolling and P11Ds
  • Class 1A NICS
  • £8,500 threshold
  • Next steps


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overnight expenses allowance

Helen Gilmour | | Permalink

how do i agree a dispensation for payment by a Ltd company to its only director for payment of £27 per night overnight allowance to cover lunch and dinner expenses when he is working away on a contract.  I would be checking all expenses and ensuring receipts received where possible but a set figure of say £27 per night would allow him to eat wherever he could and where he may not always be able to obtain a receipt for his food.  Do any others have such an agreement with HMRC.  I can complete an online application for dispensation but wonder if I should call HMRC to discuss and agree but I feel it is highly unlikely they will commit to the agreement.

Should I just submit the dispensation and include a brief description for the overnight allowance?

raybackler's picture


raybackler | | Permalink

It is great that this is being looked at.  In these days of RTI and Self Assessment, it is amazing that the rules on Expenses and Benefits are mired in the past.  The annual cycle of wrong tax codes issued after P11d submissions is a nuisance and it aggravates the very people, who are kept out of self assessment, because their payroll/PAYE affairs should be simple.

taxhound's picture

expense payments

taxhound | | Permalink

Any expense payments which are not taxable should not in any way shape or form need to appear on a P11d.  It causes lots of misunderstanding and unnecessary work and  I do not believe it serves any useful purpose to HMRC.  Taxable expenses and benefits that is of course another matter.

Payrolling? please no - at least not on a compulsory basis - this will also cause extra work for many small employers using payroll agents.

P11dx for all

roblpm | | Permalink

Is there any company that does not reimburse expenses. I have just emailed my MP about this! The P11dx is a complete waste of time!!

Extend the MPs' tax avoidance scheme

lynamn | | Permalink

Wouldn't it be much simpler if it were just deemed that the expenses were not taxable if the company or the recipient said so?

One rule for all of us

adbanks | | Permalink

Whatever the proposals that may come out of this, the same rules should apply equally to everyone - employees, the self-employed, agency workers... and most importantly MPs and MEPs


bracket creep

brownbuchanan | | Permalink

it is always wonderful when something is agreed and a limit set;but all goes well until limit is not adjusted for inflation or the fact that is not realistic.who would run a car on co business for 45p /mile;will hardly cover cost in london where even an efficient car will do 20 mpg.


iht indexation is another example;it is all a joke and great revenue earner.


a clever poly would stand up and abolish income tax for all under 20k,cause a bit of inflation,and reap /rape the benefit a year later


it is bracket creap not as often reported,fiscal drag;that is a totally different concept[but often confused]

overnight expenses allowance

drjsgw | | Permalink

Hi, - I got a dispensation by writing an Expenses Policy document against which all expenses claims are judged. I used the HMRC employees overnight rate since what is good for the goose is good for the gander. Do a search of the internet to fins example Expenses Policy for Government Employees.Simon