The Finance and Expenditure Committee of Parliament (“FEC”) has reported back the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill, with a number of amendments. The amendments are aimed at improving the operation of the various proposals in the Bill, and KPMG is generally supportive of these changes.
The headline change in the Bill is to the taxation of accommodation benefits. The Bill makes all accommodation benefits provided to employees taxable, from 1 April 2015, at the market value of the accommodation provided, unless a specific exemption applies.
A key concern for us was that this change in approach to “everything is taxable unless exempt”, from the previous “net benefit” approach, would lead to complicated law and the need for a host of exemptions and variations to the market value of accommodation to achieve an appropriate taxable outcome.
The FEC’s recommendation for further exclusions to improve the workability of the new rules confirms our concerns with the general approach taken in the Bill.
Taxmail discusses the FEC’s recommendations on the accommodation proposals, and other key changes, in the Bill.