The Association of Taxation Technicians (ATT) is urging the Treasury to focus on ensuring that employees can more easily claim the tax relief due to them on unreimbursed expenses.1
Where employees incur allowable expenses in the course of their employment such as business mileage or subscriptions, these are not always reimbursed by employers. In this case employees can seek tax relief from HMRC on the costs which they have incurred.
The Treasury is concerned that the cost of such claims is increasing but the ATT sees this as a red herring. An increase in claims may reflect a reluctance on behalf of employers to reimburse expenses in the face of economic constraints, or simply that more employees are becoming aware of the process. The ATT considers that the priority is to ensure that employees are able to claim tax relief for allowable costs incurred in the performance of their duties as simply and efficiently as possible.2
Michael Steed, Co-chair of ATT’s Technical Steering Group, said:
“The Government has highlighted what it sees as the cost of giving relief in unreimbursed expenses, but we do not see that as the issue. Where an employer does reimburse an employee’s expenses, the employer gets tax relief on that reimbursement. Claims by employees for tax relief on unreimbursed expenses do not increase the amount on which tax relief is granted. They simply change the recipient of the relief.
“We would like to see any future review that follows on from this call for evidence to focus on ensuring that employees have easy access to clear and appropriate official guidance in respect of tax deductible expenses in general and that the claim process is as easy to use as possible. The Personal Tax Account system3 could be useful in that connection.
“Where the expenses of lower paid employees are not reimbursed, our concern is that they then receive less than National Minimum/Living Wage and this is an area that needs attention.
“We also think that public sector bodies should be encouraged to adopt HMRC mileage rates to provide simplification for them and their employees as well as administrative savings.”
Notes for editors
- The ATT’s submission can be read here. The Treasury call for evidence can be found here.
- The ATT response to Treasury evidence was made after a joint survey of both ATT and CIOT members. The survey received 600 responses. The full joint survey results from CIOT/ATT survey can be found here.
- The Personal Tax Account system is an online portal allowing individuals to manage their tax affairs by pulling the personal information together in one place. More information can be found here.