Special arrangements for part-time Office Holders

28 June 2019


Prior to April 2019, public bodies were able to enter into special arrangements with HMRC to account for the tax and National Insurance contributions on behalf of part time Office Holders in respect of home to office travel and subsistence payments.


These special arrangements were in existence for a number of years prior to the introduction of PAYE Settlement Agreements.


Following a review undertaken by HMRC, it was decided to withdraw these special arrangements from 6 April 2019 and public bodies were notified of this change by letter.


The change means that any payments made to the part time Office Holders in respect of travel and subsistence payments from 6 April 2019 will have to be paid through the payroll to account for the tax and National Insurance due.


There is still the option to account for the tax and National Insurance due by grossing up the payments through the payroll. Further information on this can be found on gov.uk.


Prior to 6 April 2019, as part of the terms of a part time appointment, government departments and public bodies often paid the expense of travel between the office holder’s home and the usual place where duties are performed and a subsistence allowance for periods spent there.


Office holders were often invited to enter into an agreement whereby the payer accounts for tax on payments towards travel and subsistence. These expenses payments were then not treated as pay for tax deduction purposes, not included on the Deductions Working Sheet of the individual and not included by the individual as expenses payments on tax returns.