Autumn Quarterly Digest
An executive summary of key articles from Autumn and Summer 2022, with links to more information.
Loans to employees
Modest loans advanced to employees to meet upfront costs travel season ticket or a deposit for childcare costs must be properly documented with clear repayment terms.
- The employer is not obliged to charge interest on the outstanding capital.
- Loans larger than £10,000 mustbe declared on the annual form P11D for the employee and the benefit is calculated as the interest that the employee should have paid at the official rate (currently 2.5%).
More information
Cost of travelling to work
While travelling to the workplace may now be unaffordable for some, employers who help by reimbursing travel expenses may be creating an extra tax burden:
- Travel between an employee's home and their permanent workplace is not a tax-deductible expense.
- If the employer pays or reimburses public transport costs the payment must be treated as salary.
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Working at home deductions
Around 10 million home workers can benefit from the tax-free allowance of £6 per week (£26 per month) which their employer may choose to pay.
- Where extra costs of working at home exceed £6 per week you can claim a deduction from HMRC for the actual additional costs.
- HMRC may require proof of those costs so retain the bills as evidence.
- The homeworking deduction can be cliamed on your self-assessment tax return or by using the online form P87.
More information
Tax free gifts for company directors
A company director can receive up to £300 worth of trivial gifts tax-free every tax year. This includes gifts to family members. The following rules apply:
- Each item must cost no more than £50 including VAT
- The gift must not be cash or a cash voucher
- It must not be in recognition of services performed for the company
- Monthly subscriptions which are linked count as one purchase
- Permitted gifts include clothing, books, alcoholic beverages and gift tokens
More information
Reporting expenses through P11D
There are now 3 options for completing the P11D report by the July 2022 deadline. Please note that the interactive PDF method has been scrapped.
- The HMRC online PAYE employers service which is available for up to 500 employees
- Commercial payroll software
- The paper P11D form (which we do not recommend)
Adding taxable benefits such as health insurance or cars to payroll can also be beneficial - we can help with that.
More information
Homes for Ukraine Tax Implications
These are some tax benefits and implications to consider:
- The government provides hosts with a £350 payment each month for up to a year. In exchange the host should provide rent-free accommodation for at leat six months.
- The host can ask the refugees to contribute towards meal costs and utilities
- The host cannot claim any expenses against the income
- The payments are free from tax and NI contributions and do not impact state benefits council tax or rent-a-room
- While used to home refugees, houses are not subject to the annual tax for enveloped dwellings
More information
Last updated: September 27th 2022.
