POA Circulars

182 | 22.12.2011

HM Revenue & Customs Review

You will be aware that NOMS, along with all other Government departments and the private sector, have been the subject of a review by HMRC in respect of the payment and reimbursement of travel and subsistence and other tax issues during the past twelve months. The POA HR Sub Committee has been involved in the consultation process and regular reports have been provided to the Executive throughout the review process.

The final changes will come into effect from April 2012. The key change is as follows:

HMRC currently allows NOMS to pay the tax due on certain expenses/benefits separately from payroll under a “Pay as You Earn Settlement Agreement” (PSA). If our members claim any of the expenses/benefits below they probably do not know that they are taxable, or that NOMS is paying the tax on their behalf:

  • Travel, subsistence and accommodation costs for short term detached duty where the person’s post at their originating establishment has been back-filled.
  • Travel, subsistence and accommodation costs for long term detached duty and modified long term detached duty.
  • Day and night subsistence for work which is carried out less than five miles from the permanent workplace (this may include some bedwatches and court productions).
  • Additional childcare costs (section 12.9 in the current policy – PSI 26/).
  • Garaging costs.

However, from the 6th April 2012 claiming any of the expenses and benefits listed above will result in tax and National Insurance Contributions (NIC) being deducted through payroll. Members will be pleased to know that in discussions NOMS have agreed they will continue to pay the tax and NIC for these benefits and expenses. However, from April 2012 the amounts will show on staff payslips.

If members claim the expenses through self-service i-expenses from the 6th April 2012 they will still be reimbursed in the normal way but the value of the expenses will be taxed through the next available payroll run. NOMS will “gross up” for tax and NIC so that the right amount is deducted on the expenses claimed but NOMS bears the cost.

You should read any information notices that are published on the NOMS intranet which explain what will happen. These changes are not negotiable and have been imposed to ensure that NOMS’ processes for taxing these expenses/benefits are consistent with current tax legislation across Government and private sectors.

NOMS are currently working on the necessary changes to implement the amendments through payroll with the Shared Service Centre and have published an article and Q&A’s on the Prison Service intranet for information. Further information will be made available in due course as to how you should claim.

It is vital that all POA members who are currently claiming travel and subsistence, or other allowances, reads any news articles on the intranet about expenses between now and the end of April 2012 so that you know what is happening. Members will also need to be aware of the tax liability in the following month’s pay (but remember that NOMS will gross up for tax and National Insurance so that they, not you, pays the cost of the tax and National Insurance on the relevant expenses).

I trust you will draw the contents of this circular to the attention of all your members.

Thanking you in anticipation of your support and understanding on this matter.


Yours sincerely


General Secretary

POA Circular 182-2011 HM revenue & customs review.pdf

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