Office of Tax Simplification says benefit discriminates against shift workers who regularly work unsociable hours
The government has been accused of "sidelining personal safety" after it announced plans to abolish tax relief on the cost of late-night taxis for employees who work late or experience problems with public transport.
As part of a wider review of tax reliefs the Office of Tax Simplification has called for the benefit to be abolished on the grounds that it discriminates against shift workers who regularly work unsociable hours but who are excluded from tax relief as they are within their "usual working hours".
The benefit is often used by legal and financial services firms whose employees have to work late on urgent projects.
It is not applicable to shift workers who travel at night, unless they are working later than normal.
But there are fears the proposals will simply discourage employers from assisting with late-night transport for workers at all.
"The new proposals seem to have completely sidelined personal safety," said Roy Maugham, a tax partner at accountants UHY Hacker Young. "Many people, especially women on their own, feel unsafe travelling home during off-peak times."
Maugham suggested that the government should make it easier for employees to take taxis at night. "In a slow growth economy, employees are expected to work longer hours, often without extra pay, and could now be penalised for doing so with an extra tax burden," he said.
"Many employers will be angry that the personal safety of their employees seems to have been completely sidelined in the decision-making in order to allow the Treasury to rake in a bit more tax."
The rules allow employees to avoid paying income tax and national insurance on infrequent taxi journeys paid for by their employer if they are required to work beyond 9pm, provided it is not part of their normal working pattern. It can also apply if public transport has stopped or is substantially diminished by the time the employee leaves.
Maugham said that outside major cities, night-time travel can be even more of a headache, with no night bus services. "Many staff will be forced to make the choice between paying tax on a taxi journey and their own personal safety," he said.
The tax office said employers would still be able to enter into agreements with the Inland Revenue, by which they could agree to settle the tax on benefits such as late-night taxis.
It has also recommended abolishing the 15p income tax relief on luncheon vouchers.
Source: http://www.guardian.co.uk/money/2010/dec/15/tax-relief-late-night-taxis
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