Paul Hollick, managing director of TMC, has welcomed yesterday’s Budget promise that HMRC will return to a less-cumbersome regime for settling travel and subsistence claims.
Earlier this year, TMC called on the government to restore the facility for drivers to submit flat-rate subsistence claims based on time spent away from the office, rather than having to support every item with a receipt.
Yesterday the Chancellor announced that, to reduce the burden on employers from April 2019, they will no longer be required to check receipts when reimbursing employees for subsistence using benchmark scale rates.
Mr Hollick said:
“When HMRC asked for evidence in this area, earlier this year, we argued that flat rate expense allowances are beneficial provided they are set at a realistic level. We made the point that they mean less paperwork for the driver and the employer – and for HMRC, too, since realistic flat rates result in fewer claims for tax relief at year-end.”
He said TMC had experienced at first hand the challenging impact of removing flat rate subsistence payments in 2016.
“Until then, they allowed drivers to use our mileage system to claim a set sum for meals based on time and distance away from home or the office. Since the automatic option was removed, employers and drivers have had to process receipts for every meal and sandwich they put through. The change has been really challenging for UK businesses, especially blue collar workers.”
Mr Hollick said that restoring the ability to make a simple claim based on the time people spend travelling will benefit thousands of business and employees.
“I’m very pleased to see that HMRC has responded to the industry’s evidence with a prompt decision, although it is a shame that employers will have to wait until 2019 for relief from having to process receipts.”
TMC, which captures and processes mileage, fuel and general expense data from over 100,000 UK and European drivers, also submitted evidence to the government’s recent review of tax reliefs on expenses such as Approved Mileage Allowance Payments.
Following the review, HMRC will go back to employers and other stakeholders to look for ways to improve the clarity of its guidance to employees, the Budget announced.
Mr Hollick said: “We told the review that we’d found that only about 30% of drivers know they can claim tax relief on mileage allowance payments paid at less than the full AMAP rate. Fewer still know how to go about making a claim. We would be very happy to work with HMRC on their guidance.”