One of the hottest employment law issues this year has been – expenses. The MPs kicked off a scandal that reveals a fault line in our attitudes to “expenses” claims.
Are expenses there simply to reimburse individuals for the costs they directly incur in working for their employer? Certainly the Revenue take the view that any expenses beyond those that are unequivocally for the business are ‘benefits’, and should be taxed accordingly. By implication, the Revenue recognises that there may be a two tier “expenses” system – one for those items that are ‘wholly and necessarily incurred in the performance of one’s duties’, and not taxable benefits for the employee, and a second for “expenses” that are in the nature of benefits which are taxable in the employee’s hands.
Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060 Website : www.irenicon.co.uk. You can follow Annabel on twitter – http://twitter.com/AnnabelKaye