Government to simplify benefits-in-kind system

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The government has launched four consultations on proposed changes to simplify the administration of employee benefits in kind and expenses.

A review of employee benefits and expenses was carried out by the Office of Tax Simplification and announced during March's Budget.

The consultations will look at abolishing the £8,500 threshold for benefits in kind including actions to mitigate the impacts on vulnerable groups affected; introducing a statutory definition of a trivial benefit in kind; voluntary payrolling of benefits in kind and; replacing the dispensation regime with an exemption for qualifying expenses that are paid or reimbursed by employers.

As well as consulting on simplifying the tax treatment of employee benefits and expenses, the government is publishing a call for evidence on remuneration packages.

The OTS published its second report on employee benefits and expenses in January 2014, which concluded the tax rules and administration in this area could be simplified, easing the burden on employers.

As a result, the government published its response at Budget 2014 and outlined the areas it would consult on, as well as announcing a call for evidence on remuneration packages.

A review of the tax treatment of travel and subsistence payments has also been announced which will be launched in due course.

Exchequer Secretary to the Treasury, David Gauke (pictured), said: "We want to make sure we get the structure and detail absolutely right and each consultation will allow us to engage with and learn from those who will be directly affected.

"The government is seeking views from anyone with an interest in these areas and the consultations will close on 9 September 2014."

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