Responding to HMRC’s consultation on the delayed reporting of advance salary payments to employees, the CIOT agrees that the proposals would ease the administrative burden for employers by delaying the requirement to report the advance part of a salary payment until the remainder is paid.
The CIOT also highlights a potential pitfall where employers arrange for salary advances via a third party provider which charges employees a fee for the service. In this scenario, the reporting changes could be seen as ‘giving official approval’ to schemes involving third parties, says the CIOT.
LITRG had previously published notes on salary advance schemes, drawing attention to some of the potentially damaging downsides. As the CIOT concludes: ‘One of HMRC’s five strategic objectives is to “maintain taxpayers’ consent through fair treatment and protect society from harm”. It is unclear how HMRC accommodating the practice of third parties charging a fee to enable employees to access their earnings early, without prior public consultation, “protect[s] society from harm”’.
Responding to HMRC’s consultation on the delayed reporting of advance salary payments to employees, the CIOT agrees that the proposals would ease the administrative burden for employers by delaying the requirement to report the advance part of a salary payment until the remainder is paid.
The CIOT also highlights a potential pitfall where employers arrange for salary advances via a third party provider which charges employees a fee for the service. In this scenario, the reporting changes could be seen as ‘giving official approval’ to schemes involving third parties, says the CIOT.
LITRG had previously published notes on salary advance schemes, drawing attention to some of the potentially damaging downsides. As the CIOT concludes: ‘One of HMRC’s five strategic objectives is to “maintain taxpayers’ consent through fair treatment and protect society from harm”. It is unclear how HMRC accommodating the practice of third parties charging a fee to enable employees to access their earnings early, without prior public consultation, “protect[s] society from harm”’.
