Ros Hendren (RH) IPP
Val Hennelly (VH) HMRC
Steve Clarke (SC) CBI
Anne Davies (AD) HMRC
Trevor Blackmur (TB) ATT
David McDowell (DMcD) HMRC
Mark Groom (MG) CIoT
Steve Dodd (SD) HMRC
Shawn Healy (SH) CBI
David Ellis (DE) HMRC
Jas Jhooty (JJ) BASDA
Ann Gardner (AG) HMRC
Norman Green (NG) BCS Payroll Group
Su McLean-Tooke (SMT) HMRC
Simon Parsons (SP) BCS
Peter Bickley (PB) ICAEW
Jackie Petherbridge (JP) FSB
Val Hennelly, team leader of the new Employment Team, introduced herself and outlined the remit of the team.
Fuel Benefit Charge - there will be changes to benefit charges for employees who receive free private fuel from employers for company cars and vans. The base figures for calculating the benefit will rise from £16,900 to £18,000 for cars and from £500 to £550 for vans with effect from 6 April 2010.
Electric Cars and Vans - benefit charges in respect of private usage of wholly electric company cars or vans will be set at 0 per cent for five years with effect from 6 April 2010. This is to encourage the take up of purely electric vehicles.
Company car tax bands - these will be revised to keep pace with improvements in green technology. With effect from 6 April 2012, the 10 per cent band will be extended downwards for cars up to and including 99g/km CO2, those with 100g/km CO2 will be set at 11per cent, and an increase in the appropriate percentage of 1 per cent will be made for each 5g increase to a maximum of 35 per cent. As a result, Qualifying Low Emissions Cars will no longer exist.
Workplace canteens - with effect from 6 April 2011, the tax exemption for employer-provided free or subsidised canteen or workplace meals will not apply where the benefit is provided in conjunction with a salary sacrifice or flexible benefit arrangement.
SMT apologised for the handling of the recent changes to AFRs and thanked those members of the sub-group who were able to take part in a very constructive meeting on changes to the guidance and future handling issues. Those present were given a copy of the proposed text and asked to comment by email. The guidance will be published on the HMRC website once the group is content with the wording.
Action Point: Members of the group to email SMT to signify content or with comments on the text by 14 January 2010.
DMcD reminded the group that PBR Note 25 set out some of the detail of the proposals announced on the restriction of the exemption for free or subsidised canteen or workplace meals delivered in conjunction with salary sacrifice or flexible benefit arrangements. It was hoped that draft legislation would be ready by the end of January 2010.
Action Point - DMcD agreed to alert group members when it was published leading to employee benefits here being linked to gross salary.
There was general appreciation for the 2011 start date.
HMRC advised that the measure will not affect existing salary sacrifice schemes where the use of electronic cards and accounts has been at issue. This is because the key question with these schemes was whether an earnings charge had been avoided in the first instance, and HMRC's view is that it has not. The measure will only affect what is taxable as a benefit-in-kind through the P11D process, and will not affect in any way the scope of what is taxable and liable to NIC as earnings under PAYE.
Action Point: AD to reply to outstanding correspondence before taking this issue further.
This was included on the agenda at the request of one of the stakeholders, who asked if there were plans to extend the exemption to cover circumstances relating to the personal safety of the employee. There had been previous discussion on late night taxis in 2007 leading to an expansion in HMRC guidance. There are no plans to recommend to Ministers extending the scope of the exemption. This was an issue that was highly subjective and it would be very hard to ensure that relief was properly targeted. For example, some areas may be perceived as less safe even in daylight than other areas late at night, employers perceptions of which employees are at risk may vary considerably. It would also be difficult to define precisely when relief should apply and difficult to ensure that comparable circumstances were treated in the same way. The cost would be difficult to calculate or predict and there was always the risk that salary sacrifice would creep in as a cost and unfairness factor.
In answer to a question as to whether a group of employers could provide a mini bus which would fulfil the conditions under the 'works bus' exemption, AD and SMT promised to review the relevant legislation and come back with their interpretation.
Action Point: AD and SMT to provide their view on whether the 'workbus' exemption could apply.
SMT advised that since the last meeting of the group both DfT and HMRC have issued new guidance on Cycle to Work schemes which make the conditions around availability in the context of salary sacrifice schemes much clearer. Because of a lack of understanding and slightly ambiguous guidance in the past, HMRC has given employers some leeway to put matters on the correct footing, and guidance on that aspect was published on 14 December. Effectively, it allows employers to apply the exemption to the end of the contract period for those employees entering into a Cycle to Work scheme via salary sacrifice by 18 December 2009.
HMRC is continuing to look at issues around cycle valuation at the end of the contract period where employees then seek to purchase the cycle outright and is hoping to provide a matrix which, if followed, would provide an administrative easement for employers who lack the expertise or resources individually to value large numbers of second-hand cycles. Further work needs to be carried out to ensure than any matrix provides a genuine administrative easement without providing an outright concession.
Action Point: AD to provide a draft matrix for comment.
There was some discussion about the availability provisions. If a pool of cycles is made available to those employees who do not have a contract under the Cycle to Work scheme that would be sufficient for the exemption to apply. The group thought it would be helpful if the guidance included some worked scenarios, including on temporary and casual employees.
Action Point: AD and SMT to consider further guidance on availability later in 2010, which would allow HMRC time to evaluate feedback from this group and from other stakeholders.
AD advised the group that there has been an increase in the number of bus pass salary sacrifice schemes where there has been a misunderstanding about the meaning of support for public bus services. As a result, HMRC has recently published further guidance. Again, employers have been given time to comply on a similar basis as described for cycle to work schemes.
There are a number of issues still to be considered and the group thought it would be helpful to have a technical opinion from HMRC regarding the level of support sufficient to be meaningful and also the position on network passes.
Action Point: AD to continue to correspond with those group members who had raised specific questions on these and related issues.
P46(Car) - Members of the group asked for an update on this. HMRC apologised for not making further progress and promised to report back at the next meeting. There were also issues about the test gateway which seems to have removed the ability to check a P46(Car) submission.
Action Point: SD to investigate why the test gateway has become misaligned from the actual process and also to report to group on outcome of considerations about the future of P46(Car).
P11D - Guidance for payroll benefits.
Action Point: HMRC apologised for the delay and promised to reissue the proposal document and provide a status report.
Childcare vouchers - Further information. VH advised that this will be issued as soon as possible but cannot offer a date as yet.
Salary sacrifice for Park & Ride tickets - As this is not entirely for a public bus service, the exemption cannot apply.
Agenda item for minutes and matters arising - Agreed.
The next meeting will be on Tuesday 13 April 2010, venue to be notified.
