Consultation on the abolition of certain tax reliefsSaturday, June 4th, 2011
On 27th May, HMRC launched the promised consultation on the abolition of certain tax reliefs announced By George Osborne at the time of the Budget in March. This resulted from a report produced by the Office of Tax Simplification (OTS).
The OTS identified over 1,000 different individual exemptions, most of which are obscure and little used and a proposed reduction of 36 is less than 4% of the total. However, some of them are very relevant and commonly form part of salary sacrifice arrangements – Childcare Vouchers, Cycle to Work Scheme. Pension Salary Sacrifice.
So, what exemptions are possibly going to be hit? Well, the obscure ones relate to Angostura Bitters and Black Beer. However, those more commonly used include the provision of Late Night Taxis and Luncheon Vouchers. Whilst the provision of Luncheon Vouchers is not very common these days, I would be sorry to see the exemption disappear purely for nostalgic reasons. I started work in 1965 and in my first job used to get luncheon vouchers worth three shillings a day and, in those days, it would buy me a Chinese or Indian meal. Today, the exemption is still three shillings a day or to those who do not remember old money it is now 15p a day. What will that buy today?