LAWYERS warned yesterday that tax bills for both employees and employers associated with the disruptions caused by the Icelandic volcano are to sky rocket as the HM Revenue & Customs (HMRC) takes a hardline on repatriation costs.
Commercial law firm EMW Picton Howell said yesterday that the HMRC will demand tax payments on any expenses claimed by employees during the last six days, including transport costs to get them back to work, which will increase tax bills for employers.
“Unless the employer has expressly agreed that they will cover the repatriation costs, the employer is under no obligation to reimburse the employee,” said EMW employment lawyer Louise Holder.
The firm went on to point out that the HMRC will demand tax and national insurance on any expenses claimed if the individual was on holiday while stranded.
Meanwhile, non-residents stuck in the UK because of the volcanic ash cloud will face large tax bills if they do not cancel future planned visits to the UK, said City law firm Wedlake Bell. It warned non-residents could exceed the limit on the number of days they are permitted to be in the UK.