Extra Statutory Concessions to GoFriday, December 16th, 2011
R v HM Commissioners of Inland Revenue ex p Wilkinson was a House of Lords decision in 2005 that has become known as ‘the Wilkinson case’. In short, the case concerned the powers that HMRC have in establishing Extra-Statutory Concessions (ESCs). ESCs have been around for many decades and are described by HMRC as ‘a relaxation which gives taxpayers a reduction in tax liability to which they would not be entitled under the strict letter of the law’. The Wilkinson judgement suggested that HMRC may have exceeded their powers in granting some ESCs. As a result, HMRC reviewed all its ESCs to ensure that they were valid and that their discretion had not been exceeded. Some continued, some have been written into legislation whilst others have been withdrawn. Two such ESCs are noted below:
Company Cars for Disabled Drivers without a Blue Badge
Where a company car driver is the holder of a Blue Badge and has an automatic car, ITEPA 2003, Section 138 allows the car benefit to be calculated using the CO2 emissions of a manual car, if this proves more beneficial. A concession, outside of the above legislation, allows this situation to apply to a disabled driver without a Blue Badge.
HMRC acknowledge that they have no discretion in applying this concession, therefore, plan to withdraw it for tax years commencing on or after 06 April 2013.
Filing Extension to Form P11D(b)
The date by which forms P9D, P11D and P11D(b) are due at HMRC is before 07 July following the end of the tax year. However, paragraph 25 of leaflet CWG5 indicates that no late filing penalty will be charged for the late return of the P11D(b) if this is received at HMRC by 19 July – the same date by which non-electronic Class 1A remittances have to be received.
HMRC concede that there is no provision in legislation which allows them to allow this extension; therefore, this is being withdrawn from 31 March 2013. In practice, this means that the P11D(b) for 2012/13 must be received before 07 July 2013 (i.e. on or before 06th), otherwise penalties may be imposed. These are, currently, £100 per month or part month of lateness, for every 50 or part batch of 50 employees.
Neither of the two withdrawals is written in stone and comments are welcomed by HMRC up until 30 November 2012.
With regard to the concession for non-Blue Badge holders, this is the opportunity for those employers who use this for the benefit of their employees to make their voices heard. HMRC believe that this is a little-used concession, however, if you know otherwise, put pen to paper.
With regard to the concession for late P11D(b) submission, HMRC state, and we concede, that this is just an extension of the withdrawal of the concession that allowed us to send our P14s / P35 seven days late and not receive a penalty. However, like above, if this withdrawal from 2012/13 P11D/P9D/P11D(b) submissions is going to cause a problem, use the contact details within the document.
- Wilkinson v Inland Revenue
- HMRC – Withdrawal of Extra Statutory Concessions 6 December 2011
- HMRC – CWG5 Class 1A National Insurance Contributions on benefits in kind