Employee expenses under the spotlight

The Treasury has published a call for evidence on the taxation of employee expenses see here.

It wants to ascertain whether current rules or their administration could be clearer and simpler; whether the tax rules for expenses are fit for purpose in the modern economy; and to analyse why the cost to the exchequer of the tax relief for expenses that are not reimbursed has increased.

On the latter point the Treasury states this costs the exchequer £800m a year and there has been a 25% increase in claims between 2009-10 and 2014-15. It wants to know why this has happened.

Employers do not need to report the expenses they reimburse – these are in effect ignored for tax purposes – so the government has limited data on how much the tax relief for reimbursed expenses is worth.

The government has framed 17 questions...