Employment tax exemptions should be reviewed regularly to reflect the cost of providing employee benefits, according to audit, tax and advisory firm Blick Rothenberg.
Chesney Archer, the firm’s new employment tax director, said a range of thresholds no longer reflect the expenses employers and employees face. His call ahead of the Autumn Budget covers support such as relocation costs, annual staff events and small benefits.
A call to review limits and simplify compliance
Archer argues that updating financial limits would help businesses manage the cost of employing people. He also wants simpler administration around employment taxes, reliefs and exemptions.
“A number of employee benefits and expense thresholds have not been reviewed for several years and no longer reflect actual living costs and expenses.”
Chesney Archer, employment tax director, Blick Rothenberg
He said employers frequently tell the firm that the relocation, annual-event and trivial-benefit limits do not reflect the underlying costs. These are the firm’s proposals for review, rather than government commitments to increase the thresholds.
Check the conditions, not just the headline amounts
HMRC’s relocation guidance provides an exemption for qualifying costs up to £8,000 where the relevant conditions are met. It is not a blanket exemption for any payment linked to a move.
The annual staff-event exemption and the trivial-benefits rules also have conditions. HMRC explains that the £150-per-head event figure is not an annual allowance. A trivial benefit must cost £50 or less and satisfy the other requirements, including restrictions on cash, contractual rewards and benefits given for work or performance. See HMRC’s guidance on non-taxable payments and benefits.
Why it matters for HR and recruitment teams
Relocation support and employee benefits can influence the practical affordability of accepting or staying in a role. HR teams planning packages should work with payroll or tax specialists to understand what support costs the employer and what the employee actually receives, while continuing to apply the current rules.
Archer has joined Blick Rothenberg as a director supporting employment tax advisory work, pay governance and the Construction Industry Scheme.
Photo: Mikhail Nilov / Pexels. Illustrative stock photograph.
