Autumn Statement 2016 and the taxation of employees and off-payroll workers
HMRC have introduced many changes in the last few years on the taxation of employees and off-payroll workers, it feels like 5 or 6 a year for the past 4 years. And there are still many proposed changes in the midst of being mooted, proposed (in a Budget or Autumn Statement or party conference), being consulted upon, awaiting definitive legislation and awaiting the “go-live” date.
We have closed consultations on salary sacrifice, termination payments and loans from EBTs on which we are awaiting HMRC’s report; we have change mooted on what payroll obligations companies may face where they pay workers via their personal service companies; we have actual change coming in on 6 April 2017 where the payer of the earnings to the personal service company is a public sector body; and we have just had on 6 April this year changes to P11d expenses, abolition of dispensations, salary sacrifice into travel & subsistence (“T&S”) payments being blocked and changes to what T&S employees working via agencies can claim.
Whilst we understand the need for reform and are pleased the government consults with interested parties on proposed changes, the amount and scope of the changes over a prolonged period has and is causing confusion and uncertainty with employers. They don’t know whether an announced change has been implemented, abandoned, has changed substantively in consultation or is largely the same after consultation but has yet to come into effect. We would really like the Government to announce all the changes it would like to make in respect of the taxation of employees and workers over the next years perhaps as a 2 page summary document, or announce that it has made all the changes it wants to. Effectively, we’d like the Government to put up or shut up and to move quickly to implement or dismiss all outstanding proposals. This would at least give certainty to employers, something which is already in short supply with the UK’s impending departure from the EU, even if the effect of the changes may be to increase their tax and compliance burdens.
If you would like further information on the topics discussed in the article please contact Chris Blundell, speak to your local MHA MacIntyre Hudson advisor or send an enquiry.