From 6 April 2016 any specifically agreed tax allowances paid to employees must be renewed if over 5 years old, or rubber stamped by HMRC if under 5 years old.
The new ruling effects any national, sector, trade union or other working rule agreements including road haulage industry overnight travel rates. It will not effect published allowances.
For more information on how to obtain a new agreement to pay allowances tax free visit the government’s employment income manual online.
If you would like to have an existing agreement which is less than 5 years old approved, visit the transitional agreements section of the guide for further information.
Changes to Salary Sacrifice Schemes
You will also no longer be able to use salary sacrifice schemes to pay employees Day Subsistence Allowances or Incidental Overnight Expenses.