Consultation on taxation of travel and subsistence expenses

1 August 2014

The government is to undertake its review of the tax rules on employees’ travel and subsistence expenses in two stages. Stage 1 is a consultation to gather information beginning now and running until 23 October 2014, leading to a report in Autumn Statement 2014. Stage 2 will begin in Winter 2014, involving a working group to produce a new set of principles, to report by Budget 2015.

The travel and subsistence rules have failed to keep pace with changes in working practices. Since the rules were last updated there have been significant changes in the way the workforce operates, including the growth in the temporary labour market and an increase in the number of employees who work at home, neither of which is properly catered for in the current system. Concerns have also been raised with the government that some of the rules drive tax planning and abusive behaviour and are distorting the labour market and working practices. Given the rate of change in working practices the government intends to start from first principles and produce a new set of rules that will work with modern day practices.

For further information or to arrange a meeting or phone call to discuss your personal circumstances, please contact Simon Browning, partner in our Nottingham office.