OTS looks to replace clunky, out-dated, complex, burdensome and often unfair rules
19 August 2014
Accommodation benefit: the OTS recommends the most basic accommodation is taken out of the tax charge entirely, and that there should be a reform of the existing exemption tests with a definition based upon:
- Whether the employee is required to live in the accommodation to enable him/ her to protect buildings, people or assets.
- Whether the employee is regularly required to work outside normal working hours.
- Whether he/ she is required to live in the accommodation as a result of regulatory requirements.
The OTS also recommends that all accommodation is taxed on the basis of open market rental value, subject to review every five years.
Termination payments: the OTS recommend that when considering the current and complex rules surrounding the £30,000 threshold, that the simplest way forward is for income tax relief to be only available in circumstances where the employee qualifies for a statutory redundancy payment. Under this new relief, the OTS proposes that the level of the exemption would be a multiple of the statutory redundancy payment that the relevant individual is entitled to, or alternatively, a flat amount.
The OTS blog provides a useful summary of these and many other subjects.