The government intends to abolish 43 tax reliefs whose rationale is no longer valid based on the recommendations of the Office of Tax Simplification’s (OTS) review of tax reliefs, and continuing work from HM Revenue and Customs,.
According to Chancellor George Osborne, this will help to reduce complexity, be efficient and support growth.
The OTS published its final report on 3 March 2011 in which it recommended that 40 reliefs should be abolished. The government will consider the other areas raised in the report within a wider programme of work for the OTS.
The reliefs which will be abolished in Finance Bill 2012 after a period of consultation, include the provision of meals for bikes-for-work scheme members, luncheon vouchers and late-night taxis.
Alastair Kendrick, director of employment tax services at Mazars, said: “It is all down to tax simplification. Removing the breakfasts for cyclists goes against the government’s policy to get us fitter and greener.
“While a small token, employers who offered the benefit relished it. Employers which want to do it now will have to pay the tax on it.”
The government also intends that the following reliefs will be abolished after 2012 in future Finance Bills or other legislative vehicles, with a final date set out after the consultation: life assurance premium relief and life assurance premiums paid by employers under employer-financed retirement benefit schemes.
Read more articles on the budget’s impact on benefits