The ATT has submitted the following two representations to the Treasury ahead of the Autumn Statement on 22 November.
Extending tax relief for trivial benefits: this relates to the trivial benefits rules in ITEPA 2003 s 323A which provide tax relief for certain benefits provided by employers. The ATT proposes two amendments to the legislation. First, to allow relief where an employer reimburses an employee for a purchase which would have qualified as a trivial benefit had the employer paid for it directly – in essence, the benefit should qualify for relief regardless of whether the cost is paid directly by the employer or reimbursed. This would simplify the position for both employers and employees. The ATT gives the current example of flu jabs which are a trivial benefit where provided via a voucher given to the employee, but taxable where the employee pays for the vaccine and is reimbursed. Second, the £50 limit on trivial benefits should be increased, given it has remained at the same level since the legislation was first introduced in 2016.
Aligning the income tax treatment of jointly owned assets: the context here is the deemed 50:50 split of income between married couples and civil partners for income tax purposes (ITA 2007 s 836) which does not apply to unmarried joint property owners. The ATT suggests that the current rules are ‘unnecessarily complex and poorly understood, particularly among unrepresented taxpayers’, increasing the risk of accidental non-compliance and extra work and costs for HMRC and taxpayers and their advisers. The ATT proposes that the income tax treatment of assets which are jointly owned by co-habiting spouses and civil partners should be aligned with that applying to any other joint owners. This would remove the default 50:50 split and instead result in spouses and civil partners being liable to income tax based on their beneficial interest in the underlying asset. This would also provide a simplification, given that the current 50:50 deeming rule applies to income tax but not capital gains tax.
The ATT has submitted the following two representations to the Treasury ahead of the Autumn Statement on 22 November.
Extending tax relief for trivial benefits: this relates to the trivial benefits rules in ITEPA 2003 s 323A which provide tax relief for certain benefits provided by employers. The ATT proposes two amendments to the legislation. First, to allow relief where an employer reimburses an employee for a purchase which would have qualified as a trivial benefit had the employer paid for it directly – in essence, the benefit should qualify for relief regardless of whether the cost is paid directly by the employer or reimbursed. This would simplify the position for both employers and employees. The ATT gives the current example of flu jabs which are a trivial benefit where provided via a voucher given to the employee, but taxable where the employee pays for the vaccine and is reimbursed. Second, the £50 limit on trivial benefits should be increased, given it has remained at the same level since the legislation was first introduced in 2016.
Aligning the income tax treatment of jointly owned assets: the context here is the deemed 50:50 split of income between married couples and civil partners for income tax purposes (ITA 2007 s 836) which does not apply to unmarried joint property owners. The ATT suggests that the current rules are ‘unnecessarily complex and poorly understood, particularly among unrepresented taxpayers’, increasing the risk of accidental non-compliance and extra work and costs for HMRC and taxpayers and their advisers. The ATT proposes that the income tax treatment of assets which are jointly owned by co-habiting spouses and civil partners should be aligned with that applying to any other joint owners. This would remove the default 50:50 split and instead result in spouses and civil partners being liable to income tax based on their beneficial interest in the underlying asset. This would also provide a simplification, given that the current 50:50 deeming rule applies to income tax but not capital gains tax.
