APPG: Inquiry into public confidence in HMRC's capability to collect tax fairly and effectively - CIOT comments

6 Jul 2017

The consultation document confirms that salary sacrifice and flexible benefit arrangements involving employer pension contributions, employer-provided pension advice, employer-supported childcare and provision of workplace nurseries, and cycles and cyclist‚ s safety equipment provided under a cycle-to-work scheme will not be affected by the government‚ s proposals but all other BIKs received through such arrangements will be.

The CIOT believes that the government‚ s proposals to increase the cost of BIKs provided under salary sacrifice and certain flexible benefit arrangements will cause significant practical difficulties for employers, result in unfairness for employees and potentially conflict with other health and environmental policy in so far as the taxation of BIKs has been designed to support such policy.

Consequently, the CIOT strongly urges the government not to proceed with its proposals but to reconsider its approach to salary sacrifice and flexible benefit arrangements, and target the cause of any perceived abuses (the imbalances in the benefits code) and amend the legislation accordingly. We have real concerns that otherwise these proposals will be unworkable in practice.

Technical Team