B S writes: Some of my employees are concerned about the proposed increase
in the London congestion charge to £25. What would be the tax implications
if I paid it for them?
The rules on the tax treatment of the congestion charge follow those for
normal business travel, writes Tim Stovold, tax partner at Kingston Smith
LLP. This means that if an employer reimburses the congestion charge
incurred by an employee during “ordinary commuting” – between home and work
– the employee will be taxed on it, and both employee and company will have
to pay National Insurance on it in the same way as on normal salary.
If the congestion charge is incurred in the course of business travel, such as
travel from the office to a client, the employee will not be taxed on it.
If you want to pay for the congestion charge that is incurred by your
employees during ordinary commuting, this can only be done free of tax if an
employee has a company car. This is because HM Revenue & Customs treats
the benefit of the congestion charge as being already included in the
company-car tax charge.
You should work out whether a company car is good value for an employee who
drives into London. You will need to factor in the tax saving he or she
would make when you deduct the congestion charge from gross income, rather
than paying it from their net income. For 40% tax payers who drive in five
days a week and pay the £25-a-day charge, the weekly saving is £86. The
company would also save £27 a week on employer’s National Insurance. These
savings may mean that, for some, a company car is now more tax efficient.
TACKLING STAFF HEALTH PROBLEMS
L J writes: I am concerned about the health of some of my workers,
especially in the environment in which we work - packing and wholesale. One
of my employees is taking an increasing amount of time off work and is
considerably overweight. His absence is affecting productivity and I am
genuinely concerned about his weight. Can I approach him about the subject?
Yes, you can approach him about this matter, but you must deal with it
sensitively and with caution, writes Peter Done, managing director of
Peninsula.
There is no legislation specifically protecting overweight workers, but the
Disability Discrimination Act could be applicable in certain circumstances.
Obesity will nearly always meet the act’s requirement for the condition to
be long term and it may affect an individual’s ability to carry out normal
day-to-day activities. A weight problem could also be linked to medical
conditions such as diabetes.
Have an informal meeting with the employee and express your concerns about his
attendance and productivity and try to establish any underlying cause.
Broach the issue of his weight in a sensitive manner.
If the obesity does not amount to a disability, warn the employee that, unless
attendance and productivity improve in a reasonable time, formal action may
be taken in accordance with your disciplinary/capability procedures. If
possible, provide him with support or counselling to help him improve.
However, if it appears there may be a medical reason for the employee’s
weight, or it is possible that it may amount to a disability, you may need
to consider writing to his GP to get a medical report to assess his ability
to do his job.
You may need to consider making reasonable adjustments to assist the employee.
This could include physical changes to the workplace, alterations to the
employee’s job, and acceptance of a higher level of disability-related
absence.
Do a risk assessment to make sure any health hazards are identified and
controlled. Taking action to avoid ill health makes good business sense
because it can boost productivity, assist with employee relations and reduce
absenteeism.
Kingston Smith LLP, the chartered accountant, and Peninsula, the
employment-law firm, can advise owner-managers on their problems. Questions
should be sent to Business Doctor, The Sunday Times, 1 Pennington Street,
London E98 1ST, or faxed to 020 7782 5765. Advice is given without legal
responsibility. bizdoc@kingstonsmith.co.uk
