HMRC has issued the guidance below regarding the postponement of the proposed tax exemption trivial benefits, which was due to take effect from April 2015.
Why the sudden change?
The Finance Bill runs to a slightly different process ahead of an election because of the need to ensure that the resulting Act receives royal assent ahead of Parliament being dissolved. Given the accelerated process, some measures were deferred for consideration in a future Finance Bill.
When will the exemption be legislated?
We are hopeful that it will be included in a subsequent Finance Bill. However, we do not know when that would be.
I’ve already prepared my payroll – should I keep the changes I’ve made for the following year?
The measure has been deferred not scrapped, it is planned to be legislated in a future Finance Bill. An announcement will be made prior to introduction of the exemption allowing employers sufficient time to update their systems ahead of exemption being introduced.
What guidance should employers follow in the mean time?
In determining the appropriate tax treatment, employers should continue to apply the guidance in the Employment Income Manual at EIM21860 onwards. This applies where an employer has agreed with HMRC for a particular benefit in kind to be treated as trivial and therefore not reported on a form P11D or included in a PAYE settlement agreement.
I have already got an agreement from HMRC that I can treat a particular benefit in kind as trivial – does this still apply?
All agreements currently in place will still apply as long as there has been no change in the circumstances or type of benefits in kind provided.
HMRC has issued the guidance below regarding the postponement of the proposed tax exemption trivial benefits, which was due to take effect from April 2015.
Why the sudden change?
The Finance Bill runs to a slightly different process ahead of an election because of the need to ensure that the resulting Act receives royal assent ahead of Parliament being dissolved. Given the accelerated process, some measures were deferred for consideration in a future Finance Bill.
When will the exemption be legislated?
We are hopeful that it will be included in a subsequent Finance Bill. However, we do not know when that would be.
I’ve already prepared my payroll – should I keep the changes I’ve made for the following year?
The measure has been deferred not scrapped, it is planned to be legislated in a future Finance Bill. An announcement will be made prior to introduction of the exemption allowing employers sufficient time to update their systems ahead of exemption being introduced.
What guidance should employers follow in the mean time?
In determining the appropriate tax treatment, employers should continue to apply the guidance in the Employment Income Manual at EIM21860 onwards. This applies where an employer has agreed with HMRC for a particular benefit in kind to be treated as trivial and therefore not reported on a form P11D or included in a PAYE settlement agreement.
I have already got an agreement from HMRC that I can treat a particular benefit in kind as trivial – does this still apply?
All agreements currently in place will still apply as long as there has been no change in the circumstances or type of benefits in kind provided.
