The hospitality sector is facing financial challenges due to a HMRC loophole.
- Venues in Manchester are providing taxi fares for staff working late, ensuring safety after shifts.
- HMRC considers these taxi fares a taxable benefit-in-kind, impacting the sector financially.
- A manager revealed backdated tax bills over £30,000 for late-night staff transportation.
- Advocates are pushing for rule changes to protect venues from such financial burdens.
In Manchester, the hospitality industry is experiencing significant financial strain due to a tax loophole enforced by HMRC. Venues routinely cover taxi expenses for employees working past 9pm, ensuring their safe journey home when public transport is unavailable. However, these costs are now subjected to taxation as they are deemed a benefit-in-kind by current regulations.
The controversy arises from the inconsistency in tax policies. While regular 9-5 workers’ commutes remain untaxed, HMRC mandates that taxi fares for late-night hospitality staff be taxed unless deemed irregular and public transport is unavailable. Consequently, employees finishing work after 9pm are financially penalized, as their rides home are not considered tax-exempt.
A hotel manager, who chose to remain anonymous, shared the financial burden their establishment faces. They received a substantial backdated tax bill exceeding £30,000. The manager deemed it unfair punishment for prioritizing staff safety, remarking, “[It’s a] punishment for ensuring our staff are returning home safely. If we provide a late night taxi to take home a member of the bar team who works until 2am every Friday, that is classed as a regular occurrence and subject to charges. Are we meant to leave our staff to walk home?”
Sacha Lord, Greater Manchester’s night-time economy adviser, highlighted the urgent need for policy adjustments, labeling the loophole as “astonishing and quite sickening.” Lord emphasized that the sector supported the 2022 ‘Get Me Home Safely’ initiative aimed at securing safe transport for night workers, and now faces penalties for those efforts.
There is hope for change as Bryan Simpson of Unite the Union anticipates amendments to the Equality Act from October 26. These changes could oblige employers to ensure their workers’ safety from third-party harassment, potentially influencing current taxation interpretation.
The push for policy reform continues as the hospitality sector grapples with financial challenges imposed by current tax regulations.
