Travel and subsistence review
13 March 2015
The government review on the rules underlying the taxation of travel and subsistence expenses continues and the government has confirmed that further consultation will not commence until later in the year.
The government’s plan was to consult in two stages.
The first stage took place from July to October 2014 to enable the government to improve its understanding of the commercial realities of travel and subsistence payments. Amongst other issues, they explored the circumstances in which employers pay travel and subsistence expenses; how tax influences these decisions; and the other factors which influence commercial decision making in this area.
At this stage of the review the government was not considering the detail of possible rules themselves but instead a framework that would provide parameters within which a new system of travel and subsistence rules could be designed. This stage took the form of discussion groups with stakeholders, drawing out their views on the principles of travel and subsistence payments. The CIPP were involved in these discussions.
The second stage was to establish a working group to assist in producing a new set of principles for a new travel and subsistence tax regime. These principles were to be based upon the government’s findings from the first stage of the review.
The government intended to report on the second stage of the review at Budget 2015 but has confirmed in an update that Stage 1 work is still continuing so they will not be reporting at Budget 2015. However, they have said that should the government decide to proceed with reforming the rules, any proposals will undergo a full consultation and details of this consultation process will be published in due course.
Ernst & Young (EY) were also involved with the Stage 1 stakeholder discussions. At the end of 2014, they conducted a survey of employers to examine how they implement T&S policy within their organisations and to gauge their opinion on the current legislation. Key findings from the survey include: