The decision to phase in the mandatory payrolling of benefits in kind is a ‘welcome step’ to allow employers and payroll software providers more time to prepare for significant changes, says the Association of Taxation Technicians (ATT).

Benefits in kind are non-cash perks such as company cars or private medical insurance. Currently, most employers report these once a year using a Form P11D, with tax collected through adjustments to employees’ tax codes. This can lead to inaccuracies and the possibility of unwelcome tax bills after the end of the tax year.

Under payrolling, the value of these benefits is added to employees’ pay in real time, so the correct tax is deducted through the payroll each month. Although this improves accuracy and transparency it also requires employers to gather detailed information. They must also ensure their payroll systems can handle the changes.

HMRC had planned to introduce mandatory payrolling for all benefits and more detailed information requirements from April 2027. However, it has now confirmed a phased approach will be taken.

Jon Stride, Chair of the ATT’s Technical Steering Group, said:

‘This is a sensible and welcome step by HMRC. Moving to real-time taxation of benefits should ultimately improve accuracy for employees, but the original timetable based on full implementation in one go was overly ambitious.

‘A phased approach gives employers, software providers and HMRC the time needed to get the systems right and avoid unnecessary disruption.’

Internet link: ATT

Hospitality businesses, teams and organisations are being urged to sign a new petition calling for the government to cut the VAT rate for the sector to 10% by UKHospitality.

The trade group has launched #VATsTheProblem, a sector-wide campaign asking for the government to cut the rate of VAT for hospitality businesses, so it is in line with European levels.

UKHospitality is urging the entire sector to back its call by signing a new petition, with the aim to get a million signatures.

Hospitality groups, including the British Beer and Pub Association, the British Institute of Innkeeping and CODE Hospitality, are also supporting the campaign.

Celebrity chef and business owner Tom Kerridge said:

‘Our sector is under huge pressure. We know it. We live and breathe it every day.

‘We know that the key to unleashing hospitality’s potential to grow and thrive into the future comes through a VAT cut. We’re making sure government knows that too.

‘This is a nationwide campaign with ambassadors big and small spreading the word to everyone that will listen, all asking for the same thing; a cut to hospitality’s VAT to 10%.’

Small businesses and the self-employed struggling with their finances to receive a helping hand as debt advice services are strengthened, the Treasury has announced.

The Treasury is making a £4 million funding boost over three years for business debt advice services support.

The funding will go towards expanding access to expert support to help businesses get back on track. The Treasury says this will benefit an additional 16,000 businesses over the next three years to total 75,000 businesses.

The Treasury says the funding builds on the success of the Business Debtline delivered by Money Advice Trust

There will be an additional £2 million funding this year to help modernise debt advice, it added.

Rachel Blake, Economic Secretary to the Treasury, said:

‘From the plumber fixing your radiator to your local café, small businesses are the backbone of our economy, and we know they sometimes need a helping hand when times get tough.

‘We’re building on the success of our expert debt services to help tens of thousands more get back on their feet.’

Internet link: GOV.UK

Government plans to extend the rules requiring some taxpayers to declare ‘uncertain’ tax positions risk creating more uncertainty, compliance burdens and tax disputes according to the CIOT.

The uncertain tax treatment regime currently requires large businesses to flag uncertain interpretations of tax law to HMRC upfront if significant amounts of money are at stake.

The government is proposing to turn it into a much wider transparency regime, reaching beyond large businesses into individuals and trusts, expanding to cover additional taxes and potentially introducing a new, much broader trigger for notification.

The CIOT is warning that the proposed third trigger – where there is more than one ‘credible’ interpretation and HMRC’s view is not known – is too subjective to work effectively in practice.

Lauren Fletcher, CIOT Tax Technical Senior Manager, said:

‘These proposals would expand the uncertain tax treatment rules to more taxpayers, more taxes and a broader set of uncertainties – a potentially significant compliance expansion. But they are unworkable in their current form and need further development before any legislation is brought forward.

‘The government is right to want to reduce the ‘legal interpretation’ tax gap and give taxpayers more certainty. But these proposals risk doing the opposite regarding certainty. A notification regime should provide clarity, not create a fresh layer of uncertainty around whether a taxpayer is required to notify in the first place.’

Internet link: CIOT

More than £11 million in funding has been made available to taxpayers struggling with their tax affairs.

The doubling of funding comes as part of HMRC’s Voluntary and Community Sector Grant Funding Scheme. The funds will be available for organisations to help customers with their tax affairs.

From 8 June, organisations can submit bids for the funding, which is available for voluntary and community sector organisations to provide specialist advice and support to HMRC customers who may need extra help with their tax affairs, interacting with its digital services or claiming entitlements.

Dan Tomlinson, Exchequer Secretary to the Treasury, said:

‘I’m delighted to build on our commitment to customers who need the most support and make this latest round of funding available for our partners in the voluntary sector who provide invaluable assistance to them.

‘This funding means customers, who may be struggling with their tax affairs, are able to get the help they need to make a real difference to their situation.’

Internet link: GOV.UK