HM Treasury calls for evidence on employee expenses

22 March 2017

The treatment of self-employed expenses is out of scope of this call for evidence.

The main objectives of the call for evidence are to help HMRC better understand:

  • If the current rules or their administration can be clearer and simpler. The Office of Tax Simplification’s (OTS) review of employee benefits and expenses recommended a policy review of the expenses system to re-establish some general principles and ensure these are in line with current employment practices and government policies.
  • Whether the tax rules for expenses are fit for purpose in the modern economy. There have been major changes in working practices in recent decades, and the main principles behind the current tax rules for expenses were introduced in the mid-nineteenth century, this call for evidence will help to establish whether they remain fit for purpose.
  • Why the cost to the exchequer of the tax relief for expenses which are not reimbursed has increased? HMRC has limited data to explain the reasons behind the 25% increase in claims but wants to understand what drives the cost of this relief to understand the impact on the exchequer over time and ensure the relief is being used in the way it was intended.

Views are invited in the call for evidence from anyone with an interest in employee expenses but particularly employers and employees who use the tax relief across all sectors and employer size, and tax professionals and advisors.

Respondents may want to draw directly from their own experience and a wider understanding of practices in different sectors. Respondents should feel free to provide broad evidence or answer specific questions. The government is particularly interested in quantitative data where possible.

  • current employer practices on employee expenses
  • current tax rules on employee expenses
  • the future of employee expenses

This call for evidence includes 17 questions and will close 12 June 2017.