The CIOT, ATT and LITRG will be meeting HM Treasury officials to discuss the call for evidence on rent-a-room relief. To help inform our response to government we would welcome input from members with experience of the scheme.
In September 2017 the government published draft clauses for the Finance Bill which will be published in December 2017, known as the Winter Finance Bill, along with accompanying explanatory notes, tax information and impact notes and other supporting documents. The CIOT commented on a number of these.
PAYE is changing, HMRC is starting to use RTI data from employers in real time when recalculating employees’ tax codes. The RTI feed will be used to estimate earnings when a tax code review is triggered, for example when a new benefit-in-kind is notified. Where HMRC calculate that the new tax code will under-collect tax for the remainder of the year an in-year restriction will be included in the tax code, aimed at collecting that estimated underpayment in year.
The call for evidence was initiated by the (last) government to consider (i) whether the tax rules for expenses of employment need to change to reflect changes in employment engagement practices, (ii) whether the rules and their administration can be made simpler and clearer, and (iii) why there has been a 25% increase since 2009-10 in claims to HMRC from employees for tax relief on non-reimbursed expenses. In their submissions to the call for evidence, the ATT, CIOT and LITRG suggest that the existing system is not broken, per se, but could certainly be improved.
The review, led by Matthew Taylor (Chief Executive of the Royal Society of the Arts), was commissioned by the last government to consider how employment practices need to change in order to keep pace with new forms of work – in particular those driven by online platforms. In their submissions to the review, the CIOT and LITRG both highlight the importance of tax – something not formally within the remit of the review – in the debate.
The first Finance Act of 2017 introduces new IR35 rules for workers in the public sector, changes the way salary sacrificed benefits-in-kind are taxed and imposes a 25% tax charge on transferring pension savings offshore.