Tax and late night taxis

Last week (7 January), HM Revenue and Customs issued strict new guidelines regarding the tax treatment of late night taxis provided and paid for by employers, for employees.

As has always been the case, the basic position is that where an employee is provided with a taxi paid for by their employer for a journey from work to home, this represents a benefit in kind to the employee because such journeys are deemed to be private journeys.

If certain conditions are met however, there is an exemption from this charge and it is the detailed guidance attached to these conditions which has been updated and extended.

Under the new guidance, for the provision of a late night taxi to be exempt from a tax charge

1. the journey must be from work to home,
2. the journey must be made as a result of the employee having to work later than normal (i.e. it must not be a regular occurrence) and until at least 9pm,
3. public transport must be either unavailable/very slow at that time, or it is unreasonable to expect the employee in question to use it, and,
4. no more than 60 such taxi journeys must have been provided for that employee in the tax year.
Where a business claims the exemption it is required to keep records to show that journeys complied with the late night working conditions, although businesses do not need to give prior approval to all journeys.

If your business provides late night taxis for employees we urge you to review your procedures to take into account the new guidance.

The new guidance can be accessed here>>
If you would like to talk to someone about any benefit in kind issues please contact your usual Hazlewoods contact or click here>>