The hospitality sector is up in arms over a 'shocking' tax loophole that could be costing businesses tens of thousands of pounds annually. In Manchester, it's common practice for venues to cover taxi fares to ensure their staff get home safely after hours, especially when public transport is no longer running.
However, under HMRC regulations, these establishments could face taxation on these fares as they are considered a benefit-in-kind. This is because regular 9-5 workers' commutes are not taxed, while taxi fares can only be exempt from tax and National Insurance if the use of public transport is deemed unreasonable and the trips occur 'irregularly'.
Consequently, hospitality workers who consistently finish shifts past 9pm find their taxi rides home taxed. A hotel manager, preferring anonymity, revealed they received a backdated tax bill exceeding £30,000 for providing late-night staff transportation.
They expressed frustration, saying: "[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, described the 'loophole' as an 'astonishing and quite sickening discovery'.
The Warehouse Project founder stated: "In 2022, the industry backed calls to improve safety for late night workers and actively encouraged all operators to provide safe means of transport. Now it appears those same employers are being penalised for doing so.", reports .
"It's unquestionably wrong and this loophole needs to be adjusted to ensure that operators and staff are not taxed purely for wanting to stay safe. Put quite simply, is HMRC serious about the safety of vulnerable workers or are they not? "
Mr Lord is pressing the government to change the rules following the 2022 'Get Me Home Safely' initiative. Bryan Simpson, spokesperson for Unite the Union, believes changes to the Equality Act may come into effect from October 26, which would require employers to take all necessary steps to prevent third-party harassment from customers or the public.
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