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HMRC launches consultation on travel and subsistence payments

On 31 July 2014, HM Treasury launched a consultation on the tax treatment of travel and subsistence payments. The government intends to start from scratch and introduce new legislation that takes account of modern-day working practices. However, any new relief system will not apply to private travel or ordinary commuting. The consultation forms part of a larger review of the tax treatment of employee benefits in kind and expenses and a call for evidence on remuneration practices, following recommendations by the Office of Tax Simplification.

The consultation will be conducted in two stages:

•    First stage. This will run until October 2014 during which time the government will seek to improve its understanding of the commercial realities of travel and subsistence payments by discussing with interested parties the circumstances in which such payments are made and factors that influence decisions to make these payments. A report on this stage, which will formulate the framework, rather than the detail, of the new rules, is expected as part of the 2014 Autumn Statement. Parties that wish to take part in the first stage should contact HM Treasury via the email address set out in the announcement.

•    Second stage. This will run from winter 2014 to spring 2015 and will involve establishing a working group to produce the principles on which the new legislation will be based. A report on this stage is expected as part of the 2015 Budget.

HM Treasury states that, given the scope of the review and the complexity of devising new rules, the government has no plan to legislate for these new rules in the remainder of the current Parliament.

For more information, please contact Nick Rowe at Maitland Walker.