Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
What are lost-time payments?
If you are an employer and you make payments to your staff to cover their time while they attend third-party events, these are called lost-time payments. You are paying your employee as though they were at work even though they were attending to something non-business related. These kinds of third-party events include such things as jury service, trade union meetings or meetings of public bodies.
What are financial loss allowances?
This is another way of describing a lost-time payment or payment for loss of earnings and they are often paid to members of various public bodies, such as the NHS, as well as to magistrates and people on jury service. These are treated in the same way as lost-time payments, as far as HMRC is concerned. However, if the recipient of these allowances is self-employed (and they receive it for being on jury service, for example), this is taxable as Trading Income as a receipt of their business.
Are there any exemptions?
If the payment you make for their lost time only covers the employee’s lost earnings, there is no need to report or pay anything to HMRC. It is only when you are making additional payments that HMRC would need to know.
As an employer there is no legal requirement for you to pay staff who are required to attend jury service but many employers choose to pay their staff anyway. If you don’t pay them, the employee can claim a ‘loss of earnings allowance’ from the court.
What do you need to report and pay?
If the lost-time payment is more than the earnings your employee has lost by attending the third-party event, HMRC will consider this to be extra earnings. You need to add this extra amount to their other earnings and deduct and pay PAYE tax and Class 1 National Insurance through payroll as with their other earnings.
How can DSR Tax Claims help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.