The consultation was announced as part of the Budget and HMRC is seeking views on the use of income tax relief for employees’ business expenses. This includes those that are not reimbursed by their 
employer, such as business phone calls or use of personal cars.
The tax relief on expenses which employers do not reimburse and employees then claim from HMRC costs the Exchequer £800m per year, and there has been a 25% increase in claims between 2009-10 and 2014-15.
HMRC says the government has no plans to remove the relief on employee expenses, but that given the size and importance of the relief, it does want to understand the use of the relief better.
HMRC says there are three main questions they want answered by both employers and employees who incur business expenses:
- could the current rules or their administration be clearer and simpler;
- are the tax rules for expenses fit for purpose in the modern economy; and
- why has the cost to the exchequer of the tax relief for expenses which are not reimbursed increased?
In order to explore the answers to those questions the government is inviting evidence in the following areas:
- current employer practices on employee expenses
- current tax rules on employee expenses
- the future of employee expenses
The consultation offers a list of 17 questions covering the kinds of expenses claimed, company policies, views on the operation of the current system and suggestions for future changes.
More details can be found on the HMRC website.
