The Government has published its response to the Office of Tax Simplification (OTS) review of the taxation of employee benefits and expenses.

In Budget 2014 it was announced that, in response to the recommendations of the OTS the government would launch a package of four related consultations on employee benefits in kind and expenses. This would be alongside a longer term review of the tax treatment of travel and subsistence expenses, and a call for evidence on modern remuneration practices. These measures are focused on reducing the administrative burdens relating to benefits in kind and expenses for employers, individuals and HMRC.

This publication gave further detail of these before the consultations were formally launched. 5 consultations have now been launched as follows with each closing on 9 September 2014:-

• Remuneration practices: call for evidence

This call for evidence requests information to improve the government’s understanding of the wider picture around remuneration including the factors and issues that influence businesses’ and individuals’ decisions when negotiating remuneration packages. It asks questions across four broad areas.

• Abolition of the £8,500 threshold for lower paid employment and form P9D

The government believes that this threshold adds unnecessary complexity to the tax system and is consulting on who would be affected and how to mitigate the effects of abolition on vulnerable groups of employees.

• Trivial benefits exemption

This consultation seeks views on defining a ‘trivial’ benefit in kind and how any statutory exemption should be structured.

• Exemption for paid or reimbursed expenses

This consultation examines replacing the dispensations regime with an exemption for qualifying expenses that are paid or reimbursed by employer.

• Real time collection of tax on benefits in kind and expenses through voluntary payrolling

This consultation explores how employers can collect tax voluntarily in real time on benefits and expenses through payroll.