The government is also proposing to remove tax relief for ordinary commuting (in general, home-to-work travel) for workers who are:
- Supplying personal services
- Engaged through an employment intermediary (including PSCs); and subject to (or to the right of) the supervision, direction or control of any person
The effect of this will be that individuals whose relationship with their engager is such that they look and act like employees cannot claim relief on the everyday cost of travelling to work, when employed through an intermediary.
This is intended to ensure a level playing field for access to tax relief for travel and subsistence and, if enacted, will take effect from 6 April 2016.
Termination Payments under review
A further consultation taking place this summer is into the simplification of the tax and national insurance treatment of termination payments.
There is a widespread but mistaken belief amongst employees and employers that the first £30,000 of any pay-off is not subject to income tax and NICs.
This often leads to difficulties when employees discover that the exemption does not apply to their circumstances and that income tax and NICs are due on the full amount.
Please contact us before you make any workers redundant as it is still possible to structure termination payments in a tax-efficient way if you get the documentation correct.