The £8000 HMRC Tax Allowance for UK Taxpayers who are relocating has not been changed since 1993 - a staggering 15 years.
The allowance was originally introduced to promote labour mobility to develop talent. The allowance also provided a method for companies to support the employee without tax penalty and without having to engross the financial relocation assistance they offered.
There has undoubtedly been a considerable increase in the financial burden associated with relocating since 1993. Stamp Duty is now a considerable income stream for HM Treasury, Home Information Packs are now part of selling property and even rental properties will be required to have Energy Performance Certificates. With increased Estate Agent fees due to increased property values (don’t forget this is over the last 15 years), Land Registry Fees, Legal Fees and many other costs involved in relocation, the relocation expense outlayed by corporations has dramatically increased in 15 years.
Anecdotal evidence indicates that corporations are asking less employees to permanently relocate to meet a business need. More and more employees are being asked to travel further, often staying in Serviced Apartments, nominations or just spending more time in the car or on the train. With new restrictions on immigration, high fuel prices and the real issues concerning Global Warming it seems to me that the Government should readdress the need to encourage relocation and employee mobility. By increasing the Relocation Tax Allowance to sensible levels, more companies may be encouraged to move key employees nearer to their work, cutting down on journey times and fuel usage. The added benefits of reduced employee stress, more family time and the development of key employee talent through increased experience at different locations will positively affect the country, the company, the employee and their family.
If you want to comment on these views, please drop me an email at aleach@hcr.co.uk If I get sufficient positive support, I will start to lobby Government. Thank you.
Adrian Leach - Director Business Development & Marketing of the HCR Group
One Comment
I fully agree. I have personally relocated 5 times over the last 12 years to take up new roles / positions and the £8K does not even scrape the surface of the costs encountered with being flexible. My latest employer refuses even to meet the £8k limit??
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