Calls for change in HMRC late night staff taxis policy
By Jonathan Watt
OPERATORS and trade groups have called for a shake-up in the way HMRC views staff taxis provision, to remove the tax burden on both employers and employees.
As reported in the last issue of SLTN (May 10), the Scottish Trade Union Congress and campaign group Better Than Zero, which is running the Safe Home campaign, have lobbied Scottish Government ministers to change licensing law with the aim of obliging operators to pay for their staff’s taxis home if they finish late at night.
However, at present, there are tax implications for licensees and staff as HMRC looks upon staff taxis as a benefit in kind, which could ultimately cost employees; while there is an increased tax cost and administrative burden on operators by paying out for staff transport home.
Paul Waterson of the Scottish Licensed Trade Association (SLTA), who owns The Golden Lion Hotel in Stirling and pays for his staff’s late night cab fares, believes the current benefit in kind stance on staff taxis should be changed to benefit hospitality workers and the businesses that employ them.
He said: “As a matter of health and safety, I would prefer it if we could provide taxis to our staff at no extra cost to them or us and without the administration.
“It’s difficult enough to get staff in many rural areas without having to worry about the tax implications of paying for their taxis. It would be a lot easier for everyone involved if it wasn’t looked upon as a benefit.”
Allan James, general manager of the Park Hotel in Montrose, agreed with that suggestion, saying at a previous late night venue in Edinburgh, his employer had to stop providing cab fares.
“We always supplied our staff with taxis, which the company paid for,” he said.
“However, we stopped doing this following a routine visit from HMRC.
“Their view is that paying for a taxi for staff was a taxable benefit, the staff would have been taxed on the value of the fare being paid and the company would be liable for employer benefit in kind payments.
“I think that most businesses take the safety of their staff very seriously and would hazard a guess that a lot of employers pay for staff taxis not knowing that there may be a liability.
“It is a shame that HMRC do not see this as a safety issue – just another means of income from a sector that is already hard pressed.”
A spokesman for the Federation of Small Businesses in Scotland said the situation was “unfair” as employees could pay more tax “just because their employer made sure they got home safely”.
An HMRC spokesman pointed out that there are some circumstances where taxis can be provided without being liable for tax payments.
He said: “Late night taxis from work to home are tax-free, provided the employee is working later than usual, public transport is not available and it happens no more than 60 times a year.”
While Claire Galloway, an organiser with Better than Zero, said: “Government at all levels should do more to make employers aware of the tax exemption for safe-home allowances, and encourage employers to provide this.”