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Employee car ownership

HMRC are to hold further discussions on the interaction between company car tax, tax-free mileage allowances and employee car ownership schemes during January 2007 (see Update, 18 May 2006, page 178 for HMRC's initial announcement on this). They would like to meet a wide range of interested parties to look at this interaction and how it drives business considerations. The following gives some broad aims to these further discussions:

• explore whether, and if so how and why, the composition of fleets have changed since the second stage of the evaluation report into company cars;
• consider the factors that have contributed to employers choosing an alternative to the company car;
• explore the extent that tax/National Insurance considerations played a part in this;
• explore what aspects of company car tax cause employers most difficulty to administer and why;
• examine how businesses use mileage allowances to deliver business objectives.

The Government will use the findings of these discussions to consider whether changes are necessary to strengthen environmental incentives and protect Exchequer revenues.
The two-hour meetings will involve a ten minute presentation by HMRC followed by an open discussion with participants. They will take place at the following locations and dates:

London
8 January 10.30 am and 2 pm
9 January 2 pm

Birmingham
16 January 10.30 am and 2 pm

Interested parties should e-mail pa.harris@hmrc.gsi.gov.uk specifying the time and date or dates preferred as soon as possible. Places will be allocated on a first come basis.
www.hmrc.gov.uk

CPE costs

After the Special Commissioner's decision in favour of HMRC in Consultant Psychiatrist (SpC 557) (see Update, Taxation, 7 September 2006, page 628), in which a psychiatrist employed by an NHS trust claimed a deduction under ITEPA 2003, s 336 from her employment income for the continuing costs of counselling as being necessary for her continuing professional development and her job, HMRC have updated their Employment Income Manual to reflect the decision. Paragraph EIM32530 'Other expenses: education and training: education costs: case law' has been extended as follows:

'… no deduction is due for the costs of continuing professional education. That is so even if participation in such activities is compulsory, and failure to do so may lead to the employee losing his or her professional qualifications, and/or their job. Continuing professional education is not a duty of the employment for the purpose of Section 336.'

The manual notes that decisions in this and other cases do not set a binding precedent, but 'indicate the approach that a tribunal properly directed in the relevant law is likely to take to the point at issue'. It refers to Parikh v Sleeman [1990] STC 233, which concerned a doctor who attended seminars, where a deduction was refused.
Employment Income Manual para 32530

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