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The taxation of employee expenses

The taxation of employee expenses

No plans for fundamental reform.

Colin Ben-Nathan


KPMG in the UK


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The Government has now released its response to the summer consultation on the taxation of employee expenses and while some steps will be taken to improve the system no fundamental reform is planned.

Those intended steps were announced at Autumn Budget 2017 and are as follows:

  • A consultation in 2018 on extending the scope of tax relief currently available to employees (and the self-employed) for work-related training costs, to support lifelong learning and retraining;
  • The removal of the requirement for employers to check receipts when making payments to employees for subsistence using benchmark scale rates from April 2019, in order to reduce the administrative burden on businesses and employees;
  • Placing the existing concessionary accommodation and subsistence overseas scale rates on a statutory basis from April 2019, to provide certainty for employers; and,
  • Working with external stakeholders to explore possible improvements to the guidance on employee expenses, particularly on travel and subsistence, and the process for claiming tax relief on non-reimbursed expenses.

KPMG’s submission in response to the consultation document can be found here. We welcome the Government’s acknowledgment that work in this area requires considerable care as it impacts so many individuals and employers alike. And we particularly welcome the planned consultation on self-funded training and the planned improvements to the guidance; as we move to a digital tax system, technology has an enormous amount to offer in helping taxpayers make the right claims.

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