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October Questions and Answers

Newsletter issue – October 2023

Q: We have started reimbursing London’s extended Ultra Low Emission Zone charges when an employee must pay them whilst on business for us. Can we reimburse them free of tax?

A: Yes, the reimbursement can be made free of tax (and National Insurance). Think that this is a cost the employee has had to incur as a result of doing their job. So, really, it’s treated the same way as any other motoring cost you may reimburse such as the cost of parking or a toll road. You are very much advised to make sure all expenses reimbursed are receipted just in case HMRC checks in future!

Q: Our accountant has asked we complete a paper 64-8 authorising them to act as their agent for the Construction Industry Scheme. Can they include a scanned picture of my signature on the form or do I have to physically sign it?

A: If it’s on paper, you need to sign the form. HMRC call this a ‘wet’ signature as opposed to a digital one that could be used if you completed the form online. Maybe ask if they have an online service account so you can complete the 64-8 online and use your digital signature. In this digital world, it is, perhaps, surprising that there are only 3 online forms where you can use the digital signature – the 64-8, the P87 (for expenses) and the Marriage Allowance claim form.

Q: We are considering outsourcing our accounts and payroll function, even though they have worked OK in-house ever since we set the business up. We are a small employer with about 30 staff. Can you give me a few key pointers so I can prepare a business case for this?

A: There are many reasons why an employer might want to outsource some or all their services and different employers will benefit in different ways. However, there are some common advantages that can be a benefit to all businesses and here are some points you might want to expand on:

1. Outsourcing allows the employer to work ON their business rather than IN it
2. When the employer works ON their business and outsources some work IN the business, you get support in a variety of ways - business planning, advice on restructuring, training, business filings like RTI etc
3. An agent / accountant will have access to a range of up-to-date tools, resources, technology and software that you won't. These are all essential for compliance in a world that is increasingly complicated
4. Outsourcing doesn't mean you are divorcing yourselves of responsibility altogether but outsourcing mean you will get provided with a broader range of tools and expertise than you would have in-house, especially true of a smaller company
5. An agent / accountant will have access to the most up-to-date legislation that affects processing (and will avoid non-compliance and penalties)