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HMRC is consulting on abolishing 36 tax exemptions – What about 350 Tax Penalties

Author: Henry Ejdelbaum

Tags: Accounts payable

Well that sounds good, but wait! HMRC is consulting on cutting down the number of tax exemptions available. Some are truly exotic (removal of duty exemption on black beer) but some are closer to home. There is one specific exemption that may affect small employers and hardworking staff who work late. Currently if an employee is working unusually late (i.e. late working is not part of their work pattern) and the company pays for a taxi home, there are no tax complications. Under the new proposal such fares would be treated as a “benefit in kind”. The employee, would have to pay tax on the fare (or your company could pay it for you) and the employer will also have to pay NIC, on top of this the employer will have to administer the taxation! Brilliant!!

350 tax penalties currently in existence.
Read this again – 350! Can anyone really comprehend the number? HMRC have decided to simplify the penalties regime and make it more consistent. Hey that sounds good. It remains to be seen whether this rationalisation will actually deliver any benefits to the taxpayer or whether it is yet another attempt to cut costs. Any system that has introduced 350 penalties – we bet they won’t be able to reduce them to less than 300. I will make a £100 donation to a charity, if there will be less than 300 in 12 months time!