The hospitality sector is disputing an HMRC regulation perceived as unfair, impacting numerous venues financially.
- Venues commonly cover taxi expenses for late-night employees, yet these are taxed as a benefit-in-kind.
- This HMRC rule particularly affects those working past 9pm, with regular taxi commutes considered taxable.
- A Manchester hotel was notably hit with a backdated £30,000 tax demand due to rule enforcement.
- Prominent figures, including Sacha Lord, urge for policy changes to protect staff safety without financial penalties.
In recent developments, the hospitality industry has raised substantial concerns over an HMRC loophole resulting in unexpected financial burdens on various venues. Principally, the point of contention is the taxation on taxi fares provided to staff working late hours, terms which these establishments argue undermine efforts to ensure employee safety.
Numerous venues in Manchester and across the UK routinely pay for taxi services for employees finishing work after public transport has ceased. This practice is now challenged by HMRC regulations, which tax these expenses as a benefit-in-kind, a contrast to the non-taxable status enjoyed by conventional nine-to-five commutes.
Under current rules, taxi fares for staff are only exempt if public transport is unavailable and if usage is irregular. This has led to situations where regular late-night shifts result in taxable commutes, a scenario which many in the hospitality industry see as punitive. One anonymous hotel manager disclosed a hefty backdated tax bill exceeding £30,000, lamenting that their efforts to ensure staff safety are unfairly penalised.
Sacha Lord, a notable figure within Greater Manchester’s night-time economy, highlighted the inherent contradictions in these tax regulations. He remarked on the industry’s previous encouragement of safe transport strategies for night workers, juxtaposing them against the current penalties. His statement to the Manchester Evening News emphasised his view: “It’s unquestionably wrong and this loophole needs to be adjusted to ensure that operators and staff are not taxed purely for wanting to stay safe.”
Further, there is a call for legislative revision accompanied by proposed modifications to the Equality Act, advocated by Unite the Union’s Bryan Simpson. These changes would compel employers to mitigate third-party harassment risks, thereby reinforcing the demand for safe transport without additional financial implications.
The call for altering these taxation policies intensifies as stakeholders underline the balance between fiscal responsibility and employee welfare.
