Vol. 432 No. 3
21 Mr. Molloy asked the Minister for Finance the steps, if any, which have been taken to ensure that the issuing of P11D forms to businesses will not extend to employees earning as little as £1,500 per annum and will not relate to all expenses without any de minimis rule.
The Revenue Commissioners have not in recent years operated specific programmes to identify benefit-in-kind and other expense payments made to employees. However, following the Government decision not to introduce the proposed fringe benefits tax, the Commissioners were asked to take the necessary steps, through the use of their existing statutory powers in this area, to achieve more effective taxation of fringe benefits. The recent issue of the form P11D is one such initiative.
The form P11D is being issued to employers on a selective basis and is designed to bring into charge benefit-in-kind and other expense payments which have not already been declared to the Inspector of Taxes.
The form P11D seeks details in respect of cars, preferential loans, cash benefits, non-cash benefits, accommodation and other benefits provided to such taxpayers. To keep compliance costs to a minimum, benefits which have been subjected to PAYE and expense payments in respect of which Revenue approval for payment without deduction of tax has been granted need not be returned.
The legislation does not provide for a de minimis rule as regards the amount of a fringe benefit which must be returned — the provision of such a figure would be interpreted as a general exemption threshold in respect of taxable benefits and would be counter-productive to the task of achieving effective taxation. However, in practice, the Commissioners are not concerned about isolated small-value benefits or insignificant goods consumed on the business premises. If an employer is in doubt as to whether a particular item should be included in the form P11D, he should contact the Inspector of Taxes.
The form P11D is being issued under the provisions of section 178 of the Income Tax Act, 1967, which requires employers to make returns of benefit-in-kind and other expense payments made to, or for, employees with remuneration of £1,500 per annum and all directors. While the limit of £1,500, below which employees are not liable to tax on benefit, has stood since the legislation was introduced in 1958, the question of any adjustment in that figure cannot be considered without reference to the fundamental changes which have occurred in the meantime and to the important principle of equity involved.
