ATT welcomes flexible powers to provide necessary tax relief

The Association of Taxation Technicians (ATT) welcomes today’s (27 October) announcement that the Government will give ministers greater ability to introduce necessary income tax and NIC reliefs in the event of future disasters or emergencies of national significance.1

When the pandemic hit last year, in addition to managing the major new support measures such as the Coronavirus Job Retention Scheme (CJRS), employers found themselves having to consider the tax implications of a number of additional expenses. Such payments included reimbursing employees the cost of equipment so they could work at home, or paying for employee’s covid tests. Under tax laws at the time, such payments could have created benefit in kind charges for both employees and employers.

While HMRC moved swiftly to clarify the tax position for some of these, (including specific, time-limited measures to exempt reimbursements for office equipment and covid testing in particular), there was a period of uncertainty for employers and employees over whether such costs would cause tax issues down the line. It also meant the Government had to invest time in drawing up the necessary exemptions.

Michael Steed, Co-chair of the ATT’s Technical Steering Group, said:

“The ATT has called for HMRC to have more powers to make provision for relief for employer-funded covid testing, so we welcome the announcement in the Autumn Budget that ministers will be given wider powers to take decisions to provide income tax and NICs relief on specific expenses or benefits in kind in the event of a disaster or emergency of national significance.

“In these situations, employers are making decisions in haste, and will simply be looking to manage as best they can for their staff. In such circumstances, it is very unhelpful if existing tax laws impose additional tax costs on top. Any new measures that make it easier for HMRC to react swiftly and remove tax obstacles from employers and employees in such extraordinary circumstances are very welcome.”

Notes for editors

  1. See para 5.32 of the Autumn Budget and Spending Review 2021.
  2. HMRC’s guidance page on expenses for employees working at home was first published on 26 March 2020 and then updated a further four times as policy evolved and exemptions were introduced.
  3. The ATT’s Budget Representation on coronavirus testing is available here.
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