Officials’ starting point is that accommodation and meal costs are inherently private, so any employer reimbursement of such expenses should be taxable. The question is then whether compliance or administrative costs justify an exemption.
We believe a more practical starting point is that there is typically no private benefit to employee expenditure payments.
More fundamentally, the question needs to be asked whether the current legislation is in fact deficient.
We believe the current uncertainty can be attributed, in part at least, to Inland Revenue’s lack of a consistent or coherent approach in this area. Better Inland Revenue guidance presents an alternative approach to legislative reform.
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