Autumn Statement 2015: Employment tax updates

Autumn Statement 2015: Employment tax updates

For employers, the Autumn Statement is another piece in an on-going jigsaw of consultation and change that looks set to continue for a while yet.

Tax Partner - Head of EU Tax Group

KPMG in the UK


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Autumn statement 2015

Already in the pipeline

Employers should already be preparing for the following changes, which take effect from 6 April 2016:

  • The introduction of voluntary pay rolling and a business expenses exemption;
  • The abolition of the £8,500 threshold for benefits in kind;
  • The Scottish Rate of Income Tax;
  • Increased NICs Employment Allowance;
  • NICs exemption in relation to apprentices aged under 25; and
  • The introduction of restrictions on travel and subsistence (T&S) relief for those engaged through intermediaries.

What we would have liked to see

RTI reporting of PAYE

At last year’s Autumn Statement, the Government confirmed that there would be a post-implementation review of RTI. An active commitment to take this review forward, and to address the problems that remain with RTI, would be welcome.

Internationally mobile workers

The current rules determining how those coming to work in the UK are taxed are complex. We believe that these should be reviewed and simplified, with the overall aim of ensuring that the UK remains an attractive destination for expatriate employees, and that those employees are encouraged to use their money in the UK for the benefit of the UK economy.

PAYE Settlement Agreements

The Office of Tax Simplification has repeatedly called for a widening of the scope of PAYE Settlement Agreements (PSAs). We would support the OTS in this, and ask that HMRC consider the issue again.

Negative earnings

The Julian Martin case established that the repayment of part of a fixed bonus could be treated as negative earnings, reducing taxable pay for the year in which the repayment was made. We would like to see a commitment to publish the promised HMRC guidance in this complex area in the near future. This is particularly relevant given the current regulatory climate, where claw backs of remuneration may become more prevalent.

Find out more

Other changes that will affect employers are coming down the line – for instance the general review of travel and subsistence, and the OTS’s work on the alignment of tax and NICs. We have a limited number of places available at our seminar, which takes place in our Canada Square office on the morning of 4 December – please email KPMG Employers' Club if you would like to attend.

Our pre-Autumn Statement predictions

We were likely to hear more in the Autumn Statement on the next steps in some of the consultations that have been going on over the past few months, most notably into changes to the treatment of termination payments and IR35. 

Pension contributions can form a key part of remuneration strategies, and employers were also likely to look with interest for any indication of how the Government intends to take forward the proposals in the Pensions Green Paper. 

Autumn Statement 2015

The Chancellor of the Exchequer, George Osborne, gave his annual Autumn Statement and the 2015 Spending Review to Parliament on 25 November 2015.

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Autumn Statement 2015: On a page

View key figures from the Autumn Statement and Spending Review.

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