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TAXI's late night & weekend working

p11d reportable or payrollable

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events hospitality industry business - staff will in 2018 be required to work very late weekdays or weekends / circa event finish > 22.00hours  after a longish shift, dependant on rotas.  this will not be the norm but an infrequent, but definite occurance

will the cost of a late night cab reimbursed with receipt, or, on a company taxi account - result in a 'benefit' and reportable p11d for the staff [ if so is it also then a s336 claim by them ? ]

how does the industry handle this- it must be prevalent

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By Accountant A
14th Jan 2018 14:27

kiwilondon99 wrote:

how does the industry handle this- it must be prevalent

I would have thought that they would handle it like any other tax/finance related matter and consult their accountant/tax adviser. There are rules concerning payments to and on behalf of employees and these need to be applied to the specific circumstances.

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Replying to Accountant A:
By raycad
18th Jan 2018 12:16

Come on, that's a cheap shot! That is exactly what this forum exists for. I would agree that there is a borderline somewhere, but IMHO that would be for the more technical, complex queries, which this one isn't.

I broadly agree with DMGBus but only if the late night working takes place at or very near to the employees' permanent workplace. If the late working takes place at the event itself, for example, that would be a temporary workplace and the normal T&S rules would apply. For temporary workplaces the employer can pay whatever it likes by way of RECEIPTED costs - that would apply to taxis just as it would to first or business class travel. And, moreover, in each direction if that would be commercially sensible and cost-efficient.

Thanks (1)
By DMGbus
14th Jan 2018 15:01

There is a specific tax exemption, so check if the circumstances in the exemption apply to your case:

Where an employee is provided with a taxi paid for by his employer for a journey from work to home, this represents a benefit unless:
• the four late-night working conditions are satisfied, and
• the number of journeys is no more than 60 a year
Consequently an employee provided with a taxi from work to home once a week (52 times in a year) does not qualify for this exemption unless all the late-night working conditions are satisfied, even though they have been provided with a taxi on fewer than 60 occasions in the year.
The late-night conditions that must be satisfied are:
1) the employee is required to work later than usual and until at least 9pm
2) such late-night working occurs irregularly, and
3) by the time the employee stops work, either public transport has ceased or
it would not be reasonable to expect the employee to use it, and
4) the transport provided is by taxi or equivalent road transport
In most cases it is clear whether an employee who works until at least 9pm also works later than usual. For example, most restaurant or public house
employees usually work later than 9pm and consequently when doing so they do not work later than usual. They cannot therefore satisfy the first
condition. Something is ‘usual’ if it conforms to a common or ordinary pattern. The first condition is intended to apply when someone is required,
on occasion, to work later than usual and until at least 9pm.
If someone works later than usual and until later than 9pm this must be irregular. Irregular means not following a regular or established pattern. An employee who works later than usual and until at least 9pm every Friday, or on the last Friday of each month, is not working later than usual irregularly.
Even if an employee works later than usual and until 9pm on one day each week, but on no particular day, this is not irregular.
It is a matter of fact whether public transport is still available. If an employee’s journey home requires taking 2 or more forms of public transport and 1 of those has stopped by the time of the journey home, the third
condition is satisfied for the whole journey. An employer may consider various factors when deciding whether it is reasonable to expect an employee
to use public transport but because the journey frequency is reduced and/or must be completed in the dark, or the employee has had a long day and is
tired, or has a heavy case to carry, or is travelling to an unmanned station, are not in isolation sufficient reasons to satisfy the second part of the third
late-night working condition. The extent to which a journey from work to home after 9pm on public transport is significantly different from a journey
earlier in the day, so that it is reasonable for an employer not to expect an employee to undertake that journey, depends on the facts in each case.

Source: HMRC guidance 480(2017)
Expenses and benefits
A tax guide

Thanks (2)
By Matrix
18th Jan 2018 12:56

If the amount is less than £50 then refer to the trivial benefit rules.

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Replying to Matrix:
Justine Riccomini
By Justine Riccomini
04th Aug 2019 11:22

Hi there, I came across this thread today and I appreciate I am late to the party!

However, I just wanted to say that hopefully, if someone did check the trivial benefits legislation where the cost was £50 or less, they would conclude that it doesn't apply in this situation.

The item cannot be classified as a trivial benefit because it fails the test at S323A condition D, i.e. ..."the benefit is not provided in recognition of particular services performed by the employee in the course of the
employment or in anticipation of such services."

As such, HMRC would be highly unlikely to accept the trivial benefits argument for exclusion.

Otherwise, every taxi journey under £50 falling outside the late night taxis exemption could potentially be treated as a separate trivial BIK.

It should therefore be classified as a non-exempt BIK and included in a PSA.

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By skaickin
18th Jan 2018 18:05

An employee who doesn't qualify for tax exemption on a late night ride home paid for by their employer may still be quite prepared to pay the tax on that benefit as it will still work out cheaper than the full cost of the ride. My experience is that employers seem to get into the mind set that if paying for something for an employee means a tax liability arises then it can't be done whereas it can be done so long as the benefit is declared, e.g. on a P11D.

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Replying to skaickin:
By raycad
18th Jan 2018 18:31

Whilst that's true, there are very few employers who would want to stomach the employee "badwill" that that would generate. And, as a minimum, the employer would have to pay the 13.8% E'ers NI (either Class 1 or Class 1A), so that represents a very real cost.

In practice most employers in this situation put the expenses through a PSA. With grossing up, the extra cost will be around 50% and nearly double that for higher rate employees.

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