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Benefit in Kind or a Compliance with Infection, Prevention and Control?
What is a benefit in kind?
A benefit-in-kind (BIK) is any non-cash benefit of monetary value that you provide for your employee. These benefits can also be referred to as notional pay, fringe benefits or perks. The benefits have monetary value, so they must be treated as taxable income.
What does HMRC state in relation to Taxis?
The HMRC are very clear on benefits in kind and have a host of readily published information ready to make clear when they consider these to be benefits and as such, they become declarable.
These can include:
- Travel and subsistence
- Public transport
- Taxi Travel
What do they say specifically about Taxis?
In relation to taxis, the HMRC’s guidance is mainly focused on late night travel and has a limit of 60 trips a year before taxable rules kick in. HMRC don’t refer to COVID or any exceptions because of COVID.
What does the DHSC say about transport and minimise the risk of COVID transmission?
The guidance Admission and Care of Residents in a Care Home During COVID-19 Updated 17 May 2021 in Annex E: restricting workforce movement and minimising workforce transmission states
‘Take steps to limit use of public transport by members of staff. Where they do not have their own private vehicle, this could include encouraging walking or cycling to and from work and supporting this with changing facilities or rooms, ideally used separately rather than at the same time on shift change. In some instances, local taxi firms may be willing to provide fares to and from a care home at discounted rates’.
What does this all mean?
Clearly this is an area where the two government departments need to have conversations about flexing and defining the rules. If you are paying for taxis for staff from your Infection and Prevention Control Fund as outlined in the guidance as an area that the fund could be spent to ensure that you could take steps to limit the use of public transport by members of staff (taking into account current government guidance on the safe use of other types of transport by members of staff), it is therefore unclear if the payment of a taxi for a member of staff is a taxable benefit.
So, what should you do?
The best advice we could possibly give due to the continued disparity is speak to your payroll or accountants and have a clearly recorded discussion with guidance from your financial advisory team documented.
You could also have a discussion with your local IPC team to ask if they have an official view and hopefully this grey area will be addressed shortly.
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