Few surprises on employment taxes
Some of the most notable changes announced include:
- a consultation on non-compliance with the intermediaries legislation in the private sector and a comment that the first step could be to extend recent public sector reforms to the private sector. This is part of the government’s wider initiatives around employment status, which also include a discussion paper on Matthew Taylor’s review of employment practices;
- the confirmation of changes removing foreign service relief on termination payments from 6 April 2018. Alongside other changes to termination payments, including the introduction of post-employment notice pay from 6 April 2018 and the alignment of the tax and NICs rules from 6 April 2019, employees and employers are likely to see increased costs and administration on termination;
- proposed green initiatives on the provision of company cars. From April 2018, there will be no benefit in kind for employees charging their electric cars at their workplace, and the diesel supplement will increase on certain diesel cars;
- welcome improvements to the taxation and administration of employee business expenses including a consultation to extend tax relief to employees who incur their own work-related training costs, and a simplification to reduce the obligation for employers to check receipts when applying HMRC’s benchmark scale rates;
- confirmation of the intention to enact further 'disguised remuneration' rules that catch arrangements involving the provision of employment income by third parties; and
- a relaxation of the Save As You Earn rules to help employees on parental leave pause contributions for 12 months rather than the current six months, in line with modern practices on the length of parental leave.
We are promised further guidance and updates on many of these issues on 1 December 2017.