Public and Commercial Services Union

There was a “Hotseat” question and answer last year which suggested that the Travel and Subsistence (T&S) Guidance on the taxability of DTA to those who qualify under the terms of the DDA was to be amended.

Briefly, the guidance stated that it is payable free of Income Tax and National Insurance Contributions (NIC) but HMRC did not think that this was wholly correct and have continued to tax the payments.

Both PCS and ARC objected to this and have been in discussions to try and resolve the matter.

Present position

HMRC has now confirmed that these payments are payable without deduction of Tax or NIC and that this applies to all who have a disability covered by the DDA (the definition is broader than just physical mobility).

However the position regarding any payments made in the last 6 years is not yet clear and HMRC is still waiting for further information from PD1 as to how the matter is to be resolved.

We are still pressing HMRC to sort out the practical issues as quickly as possible and to publish the revised Guidance with the advice on how a claim should be made. In the meantime they have assured us that members who have registered a claim since 1 June 2008 will have a refund paid with their March salary.

HMRC will be issuing letters to all those affected. Future claims will also be paid without deduction of Income tax or NIC.

Members are advised that PCS cannot enter into any correspondence regarding the tax status of these payments or any individual's tax affairs. Members should wait for further advice from HMRC on this issue or contact PD1.

Future

We are still waiting for HMRC to publish the new guidance which will contain information on how DTA payments will in practice be paid in full to a disabled person.

An Intranet announcement will be made when HMRC have sorted this out which will contain more information on the practical aspects of how to make a claim and how it will be dealt with.

We realise that, although the principle has now been won, many members will still be concerned about earlier years and how to make a claim for a refund. HMRC have assured us that they are working with PD1 to sort out all the practical difficulties so that any problems which may arise from back or future claims are minimised.

We understand the concern this has caused members and in particular those transferred quite recently who were assured that the payments would be paid in full.

Negotiations on this issue have been quite complex but the situation, in principle, has now been resolved. HMRC is still working on the practical issue regarding back claims but they have assured us that any payments made in the future will definitely be covered under the new procedures.

Any comments or concerns regarding this should be sent to:

helenw@pcs.org.uk or lynda.priestley@hmrc.gsi.gov.uk