The hospitality sector is confronting a challenging tax loophole affecting employee safety.
- Venues are taxed on taxi fares for staff working late, viewed as a benefit-in-kind by HMRC.
- This taxation impacts venues financially, costing potentially tens of thousands annually.
- Businesses argue these charges unfairly penalise efforts to ensure staff safety after hours.
- There is increasing pressure on HMRC to reconsider policies impacting late-night workers’ safety.
Within the hospitality sector, a significant issue has come to light regarding the taxation of taxi fares provided by venues to their employees working late shifts. Under current HMRC regulations, these taxi fares are classified as a benefit-in-kind, thereby subject to taxation. This discovery has led to widespread concern across the industry, highlighting the financial burden placed on businesses endeavouring to ensure their staff’s safe return home.
In cities like Manchester, it is a standard practice for venues to arrange and cover costs for taxi rides for staff who finish work late in the evening, especially during hours when public transport options are no longer available. However, HMRC’s stance dictates that while regular daily commutes are non-taxable, taxi fares can only be exempt if public transport is deemed unreasonable and such expenses occur irregularly. As a result, workers ending their shifts post-9pm routinely face taxed commutes.
A particular case disclosed by a hotel manager, who requested anonymity, revealed a backdated tax bill of more than £30,000, stemming from their policy of assuring safe transport for late-night workers. The manager expressed frustration, stating this tax imposition feels like a punishment for caring for staff safety, questioning whether leaving staff to walk home is the expected alternative.
Prominent figures like Sacha Lord, Greater Manchester’s night-time economy adviser, have described the situation as ‘astonishing and quite sickening’, citing it as deeply unjust for businesses proactively ensuring worker safety to face such penalties. Mr Lord is actively campaigning for a revision in the policy following the ‘Get Me Home Safely’ initiative of 2022, designed to promote safe transport for night workers.
Similarly, representation from Unite the Union, including spokesperson Bryan Simpson, indicates potential changes on the horizon. He points to potential amendments to the Equality Act expected from October 26, which may call for employers to undertake measures preventing third-party harassment, indirectly affecting how transportation obligations may be perceived.
The pressing need for policy adjustment on taxing late-night staff transport is evident, highlighting the conflict between taxation and employee safety priorities.
