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Income Tax (Earnings and Pensions) Act 2003

United Kingdom · statute

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In force since 2026-07-15, as the publisher states.

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Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 1,080 provisions
  1. Title and introductory text
  2. 1 Overview of contents of this Act
  3. 2 Abbreviations and general index in Schedule 1
  4. 3 Structure of employment income Parts
  5. 4 “Employment” for the purposes of the employment income Parts
  6. 5 Application to offices and office-holders
  7. 6 Nature of charge to tax on employment income
  8. 7 Meaning of “employment income”, “general earnings” and “specific employment income”
  9. 8 Meaning of “exempt income”
  10. 9 Amount of employment income charged to tax
  11. 10 Meaning of “taxable earnings” and “taxable specific income”
  12. 11 Calculation of “net taxable earnings”
  13. 12 Calculation of “net taxable specific income”
  14. 13 Person liable for tax
  15. 14 Taxable earnings under this Chapter: introduction
  16. 15 Earnings for year when employee UK resident
  17. 16 Meaning of earnings “for” a tax year
  18. 17 Treatment of earnings for year in which employment not held
  19. 18 Receipt of money earnings
  20. 19 Receipt of non-money earnings
  21. 20 Taxable earnings under this Chapter: introduction
  22. 21 Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings
  23. 22 Chargeable overseas earnings for year when remittance basis applied and employee outside section 26
  24. 23 Calculation of “chargeable overseas earnings”
  25. 24 Limit on chargeable overseas earnings where duties of associated employment performed in UK
  26. 24A Restrictions on remittance basis
  27. 24B Definitions of “C” and “I” for the purposes of section 24A(14)
  28. 25 UK-based earnings for year when employee resident, but not ordinarily resident, in UK
  29. 26 Foreign earnings for year when remittance basis applied and employee met section 26A requirement
  30. 26A Section 26: requirement for 3-year period of non-residence
  31. 27 UK-based earnings for year when employee not resident in UK
  32. 28 Meaning of “general earnings from overseas Crown employment subject to UK tax”
  33. 29 Meaning of earnings “for” a tax year
  34. 30 Treatment of earnings for year in which employment not held
  35. 38 Earnings for period of absence from employment
  36. 38A Earnings relating to duties not performed
  37. 39 Duties in UK merely incidental to duties outside UK
  38. 40 Duties on board vessel or aircraft
  39. 41 Employment in UK sector of continental shelf
  40. 41ZA Basis of apportionment
  41. 41A Taxable specific income from employment-related securities: effect of remittance basis
  42. 41B Section 41A: the relevant period
  43. 41C Section 41A: foreign securities income
  44. 41D Limit on foreign securities income where duties of associated employment performed in UK
  45. 41E Foreign securities income: just and reasonable apportionment
  46. 41F Taxable specific income: internationally mobile employees etc
  47. 41G Section 41F: the relevant period
  48. 41H Section 41F: chargeable and unchargeable foreign securities income
  49. 41I Limit on “chargeable foreign securities income” where duties of associated employment performed in UK
  50. 41J Location of employment duties
  51. 41K Securities income from overseas Crown employment
  52. 41L Chargeable and unchargeable foreign securities income: just and reasonable apportionment
  53. 41M Foreign employment election for qualifying new residents
  54. 41N Key definitions
  55. 41P Claim for relief for qualifying new residents
  56. 41Q Amount of relief available
  57. 41R Limit on relief
  58. 41S Effect of claim on relief for contributions to registered pension schemes
  59. 41T Foreign employment relief ignored for purposes of determining adjusted net income
  60. 41U Qualifying foreign general earnings
  61. 41V Qualifying foreign third party income
  62. 41W Qualifying foreign securities income
  63. 41X Meaning of “overseas Crown employment subject to UK tax”
  64. 41Y Location of employment duties
  65. 41Z Artificial arrangements to be disregarded
  66. 41Z1 Limit on qualifying foreign employment income from associated employments
  67. 43 Appeal against Commissioners' decision on domicile or ordinary residence
  68. 44 Treatment of workers supplied by agencies
  69. 45 Arrangements with agencies
  70. 46 Cases involving unincorporated bodies etc.
  71. 46A Anti-avoidance
  72. 47 Interpretation of this Chapter
  73. 48 Scope of this Chapter
  74. 49 Engagements to which this Chapter applies
  75. 50 Worker treated as receiving earnings from employment
  76. 51 Conditions of liability where intermediary is a company
  77. 52 Conditions of liability where intermediary is a partnership
  78. 53 Conditions of liability where intermediary is an individual
  79. 54 Calculation of deemed employment payment
  80. 55 Application of rules relating to earnings from employment
  81. 56 Application of Income Tax Acts in relation to deemed employment
  82. 57 Earlier date of deemed employment payment in certain cases
  83. 58 Relief in case of distributions by intermediary
  84. 59 Provisions applicable to multiple intermediaries
  85. 60 Meaning of “associate”
  86. 60A When a company qualifies as small for a tax year
  87. 60B When a company qualifies as small for a tax year: joint ventures
  88. 60C When a company qualifies as small for a tax year: subsidiaries
  89. 60D When a relevant undertaking qualifies as small for a tax year
  90. 60E When other undertakings qualify as small for a tax year
  91. 60F When other persons qualify as small for a tax year
  92. 60G Sections 60A to 60F: connected persons
  93. 60H Duty on client to state whether it qualifies as small for a tax year
  94. 60I When a person has a UK connection for a tax year
  95. 61 Interpretation
  96. 61A Scope of this Chapter
  97. 61B Meaning of “managed service company”
  98. 61C Section 61B: supplementary
  99. 61D Worker treated as receiving earnings from employment
  100. 61E Calculation of deemed employment payment
  101. 61F Sections 61D and 61E: application of rules relating to earnings from employment
  102. 61G Application of Income Tax Acts in relation to deemed employment
  103. 61H Relief in case of distributions by managed service company
  104. 61I Meaning of “associate”
  105. 61J Interpretation of Chapter
  106. 61K Scope of this Chapter
  107. 61L Meaning of “public authority”
  108. 61M Engagements to which Chapter applies
  109. 61N Worker treated as receiving earnings from employment
  110. 61NA Meaning of status determination statement
  111. 61O Conditions where intermediary is a company
  112. 61P Conditions where intermediary is a partnership
  113. 61Q Calculation of deemed direct payment
  114. 61R Application of Income Tax Acts in relation to deemed employment
  115. 61S Deductions from chain payments
  116. 61T Client-led status disagreement process
  117. 61TA Duty for client to withdraw status determination statement if it ceases to be medium or large
  118. 61U Information to be provided by worker or intermediary and consequences of failure
  119. 61V Consequences of providing fraudulent information
  120. 61W Prevention of double charge to tax and allowance of certain deductions
  121. 61WA Anti-avoidance
  122. 61X Interpretation
  123. 61Y Umbrella companies: joint and several liability
  124. 61Z Relevant parties
  125. 61Z1 Purported umbrella companies
  126. 61Z2 Disclosures to liable persons
  127. 62 Earnings
  128. 63 The benefits code
  129. 64 Relationship between earnings and benefits code
  130. 65 Dispensations relating to benefits within provisions not applicable to lower-paid employment
  131. 66 Meaning of “employment” and related expressions
  132. 67 Meaning of “director” and “full-time working director”
  133. 68 Meaning of “material interest” in a company
  134. 69 Extended meaning of “control”
  135. 69A Optional remuneration arrangements
  136. 69B Optional remuneration arrangements: supplementary
  137. 70 Sums in respect of expenses
  138. 71 Meaning of paid or put at disposal by reason of the employment
  139. 72 Sums in respect of expenses treated as earnings
  140. 73 Cash vouchers to which this Chapter applies
  141. 74 Provision for, or receipt by, member of employee’s family
  142. 75 Meaning of “cash voucher”
  143. 76 Sickness benefits-related voucher
  144. 77 Apportionment of cost of provision of voucher
  145. 78 Voucher made available to public generally
  146. 79 Voucher issued under approved scheme
  147. 80 Vouchers where payment of sums exempt from tax
  148. 81 Benefit of cash voucher treated as earnings
  149. 82 Non-cash vouchers to which this Chapter applies
  150. 83 Provision for, or receipt by, member of employee’s family
  151. 84 Meaning of “non-cash voucher”
  152. 85 Non-cash voucher made available to public generally
  153. 86 Transport vouchers under pre-26th March 1982 arrangements
  154. 87 Benefit of non-cash voucher treated as earnings
  155. 87A Benefit of non-cash voucher treated as earnings: optional remuneration arrangements
  156. 88 Year in which earnings treated as received
  157. 89 Reduction for meal vouchers
  158. 90 Credit-tokens to which this Chapter applies
  159. 91 Provision for, or use by, member of employee’s family
  160. 92 Meaning of “credit-token”
  161. 93 Credit-token made available to public generally
  162. 94 Benefit of credit-token treated as earnings
  163. 94A Benefit of credit-token treated as earnings: optional remuneration arrangements
  164. 95 Disregard for money, goods or services obtained
  165. 96 Dispensations relating to vouchers or credit-tokens
  166. 96A Power to exempt use of non-cash vouchers or credit-tokens to obtain exempt benefits
  167. 97 Living accommodation to which this Chapter applies
  168. 98 Accommodation provided by local authority
  169. 99 Accommodation provided for performance of duties
  170. 100 Accommodation provided as result of security threat
  171. 100A Homes outside UK owned through company etc
  172. 100B Section 100A(1): exceptions
  173. 101 Chevening House
  174. 102 Benefit of living accommodation treated as earnings
  175. 103 Method of calculating cash equivalent
  176. 103A Accommodation provided pursuant to optional remuneration arrangements: relevant amount
  177. 104 General rule for calculating cost of providing accommodation
  178. 105 Cash equivalent: cost of accommodation not over £75,000
  179. 105A Lease premiums
  180. 105B Lease premiums in the case of leases with break clauses
  181. 106 Cash equivalent: cost of accommodation over £75,000
  182. 107 Special rule for calculating cost of providing accommodation
  183. 108 Cash equivalent: accommodation provided for more than one employee
  184. 109 Priority of this Chapter over Chapter 1 of this Part
  185. 110 Meaning of “annual value”
  186. 111 Disputes as to annual value
  187. 112 Meaning of “person involved in providing the accommodation”
  188. 113 Meaning of “the property”
  189. 114 Cars, vans and related benefits
  190. 115 Meaning of “car” and “van”
  191. 116 Meaning of when car or van is available to employee
  192. 117 Meaning of car or van made available by reason of employment
  193. 118 Availability for private use
  194. 119 Where alternative to benefit of low emission car or van offered
  195. 120 Benefit of car treated as earnings
  196. 120A Benefit of car treated as earnings: optional remuneration arrangements
  197. 121 Method of calculating the cash equivalent of the benefit of a car
  198. 121A Optional remuneration arrangements: method of calculating relevant amount
  199. 121B Meaning of “modified cash equivalent”
  200. 122 The price of the car
  201. 123 The list price of a car
  202. 124 The notional price of a car with no list price
  203. 124A Automatic car for a disabled employee
  204. 125 Meaning of “accessory” and related terms
  205. 125A Security features not to be regarded as accessories
  206. 126 Amounts taken into account in respect of accessories
  207. 127 The list price of an accessory
  208. 128 Accessory: published price of the car manufacturer etc.
  209. 129 Accessory: published price of the accessory manufacturer etc.
  210. 130 The notional price of an accessory
  211. 131 Replacement accessories
  212. 132 Capital contributions by employee
  213. 132A Capital contributions by employee: optional remuneration arrangements
  214. 133 How to determine the “appropriate percentage”
  215. 134 Meaning of car with or without a CO2 emissions figure
  216. 135 Car with a CO2 emissions figure: pre-October 1999 registration
  217. 136 Car with a CO2 emissions figure: registration from 1st October 1999 to IP completion day
  218. 136A Car with a CO2 emissions figure: registration on or after IP completion day
  219. 137 Car with a CO2 emissions figure: bi-fuel cars : registration from 1st January 2000 to IP completion day
  220. 137A Car with a CO2 emissions figure: bi-fuel cars registered on or after IP completion day
  221. 138 Car with a CO2 emissions figure: automatic car for a disabled employee
  222. 138A Certain cars with a CO2 emissions figure and an electric range figure
  223. 139 Cars with a CO2 emissions figure: the appropriate percentage
  224. 140 Car without a CO2 emissions figure: the appropriate percentage
  225. 141 Diesel cars: the appropriate percentage
  226. 142 Car first registered before 1st January 1998: the appropriate percentage
  227. 143 Deduction for periods when car unavailable
  228. 144 Deduction for payments for private use
  229. 145 Modification of provisions where car temporarily replaced
  230. 146 Cars that run on road fuel gas
  231. 147 Classic cars: 15 years of age or more
  232. 147A Classic cars: optional remuneration arrangements
  233. 148 Reduction of cash equivalent where car is shared
  234. 149 Benefit of car fuel treated as earnings
  235. 149A Benefit of car fuel treated as earnings: optional remuneration arrangements
  236. 150 Car fuel: calculating the cash equivalent
  237. 151 Car fuel: nil cash equivalent
  238. 152 Car fuel: proportionate reduction of cash equivalent
  239. 153 Car fuel: reduction of cash equivalent
  240. 154 Benefit of van treated as earnings
  241. 154A Benefit of van treated as earnings: optional remuneration arrangements
  242. 155 Cash equivalent of the benefit of a van
  243. 156 Meaning of “shared van”
  244. 157 Reduction of cash equivalent where van is shared
  245. 158 Reduction for payments for private use
  246. 158A Van provided pursuant to optional remuneration arrangements: private use
  247. 159 Modification of provisions where van temporarily replaced
  248. 160 Benefit of van fuel treated as earnings
  249. 160A Benefit of van fuel treated as earnings: optional remuneration arrangements
  250. 161 Van fuel: the cash equivalent
  251. 162 Van fuel: nil cash equivalent
  252. 163 Van fuel: proportionate reduction of cash equivalent
  253. 164 Van fuel: reduction of cash equivalent
  254. 167 Pooled cars
  255. 168 Pooled vans
  256. 169 Car available to more than one member of family or household employed by same employer
  257. 169A Van available to more than one member of family or household employed by same employer
  258. 170 Orders etc. relating to this Chapter
  259. 171 Minor definitions: general
  260. 172 Minor definitions: equipment to enable a disabled person to use a car
  261. 173 Loans to which this Chapter applies
  262. 173A Alternative finance arrangements
  263. 174 Employment-related loans
  264. 175 Benefit of taxable cheap loan treated as earnings
  265. 175A Optional remuneration arrangements: “relevant amount” and “modified cash equivalent”
  266. 176 Exception for loans on ordinary commercial terms
  267. 177 Exceptions for loans at fixed rate of interest
  268. 178 Exception for loans where interest qualifies for tax relief
  269. 179 Exception for certain advances for necessary expenses
  270. 180 Threshold for benefit of loan to be treated as earnings
  271. 181 The official rate of interest
  272. 182 Normal method of calculation: averaging
  273. 183 Alternative method of calculation
  274. 184 Interest treated as paid
  275. 185 Apportionment of cash equivalent in case of joint loan etc.
  276. 186 Replacement loans
  277. 187 Aggregation of loans by close company to director
  278. 188 Loan released or written off: amount treated as earnings
  279. 189 Exception where double charge
  280. 190 Exclusion of charge after death of employee
  281. 191 Claim for relief to take account of event after assessment
  282. 201 Employment-related benefits
  283. 202 Excluded benefits
  284. 203 Cash equivalent of benefit treated as earnings
  285. 203A Employment-related benefit provided under optional remuneration arrangements
  286. 204 Cost of the benefit: basic rule
  287. 205 Cost of the benefit: asset made available without transfer
  288. 205A Deduction for periods when asset unavailable for private use
  289. 205B Reduction of cost of taxable benefit where asset is shared
  290. 206 Cost of the benefit: transfer of used or depreciated asset
  291. 207 Meaning of “annual rental value”
  292. 208 Meaning of “market value”
  293. 209 Meaning of “persons providing benefit”
  294. 210 Power to exempt minor benefits
  295. 211 Special rules for scholarships: introduction
  296. 212 Scholarships provided under arrangements entered into by employer or connected person
  297. 213 Exception for certain scholarships under trusts or schemes
  298. 214 Scholarships: cost of the benefit
  299. 215 Limitation of exemption for scholarship income in section 776(1) of ITTOIA 2005
  300. 221 Payments where employee absent because of sickness or disability
  301. 222 Payments by employer on account of tax where deduction not possible
  302. 223 Payments on account of director’s tax other than by the director
  303. 224 Payments to non-approved personal pension arrangements
  304. 225 Payments for restrictive undertakings
  305. 226 Valuable consideration given for restrictive undertakings
  306. 226A Amount treated as earnings
  307. 226C Only one payment deemed to be made under associated agreements
  308. 226E Sporting testimonial payments
  309. 227 Scope of Part 4
  310. 228 Effect of exemptions on liability under provisions outside Part 2
  311. 228A General exclusion from exemptions: optional remuneration arrangements
  312. 229 Mileage allowance payments
  313. 230 The approved amount for mileage allowance payments
  314. 231 Mileage allowance relief
  315. 232 Giving effect to mileage allowance relief
  316. 233 Passenger payments
  317. 234 The approved amount for passenger payments
  318. 235 Vehicles to which this Chapter applies
  319. 235A Journeys made by members of local authorities etc
  320. 236 Interpretation of this Chapter
  321. 237 Parking provision and expenses
  322. 237A Vehicle-battery charging
  323. 238 Modest private use of heavy goods vehicles
  324. 239 Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles
  325. 240 Incidental overnight expenses and benefits
  326. 241 Incidental overnight expenses and benefits: overall exemption limit
  327. 241A Travel by unpaid directors of not-for-profit companies
  328. 241B Travel where directorship held as part of trade or profession
  329. 242 Works transport services
  330. 243 Support for public bus services
  331. 244 Cycles and cyclist’s safety equipment
  332. 245 Travelling and subsistence during public transport strikes
  333. 246 Transport between work and home for disabled employees: general
  334. 247 Provision of cars for disabled employees
  335. 248 Transport home: late night working and failure of car-sharing arrangements
  336. 248A Emergency vehicles
  337. 249 Interpretation of this Chapter
  338. 250 Exemption of work-related training provision
  339. 251 Meaning of “work-related training”
  340. 252 Exception for non-deductible travel expenses
  341. 253 Exception where provision for excluded purposes
  342. 254 Exception where unrelated assets are provided
  343. 254A Apprenticeship bursaries paid to persons leaving local authority care
  344. 255 Exemption for contributions to individual learning account training
  345. 256 Meaning of “individual learning account training”
  346. 257 Exception for non-deductible travel expenses
  347. 258 Exception where provision for excluded purposes
  348. 259 Exception where unrelated assets are provided
  349. 260 Exception where training not generally available to staff
  350. 261 Exemption of recreational benefits
  351. 262 Benefits not exempted by section 261
  352. 263 Power to alter benefits to which section 261 applies
  353. 264 Annual parties and functions
  354. 265 Third party entertainment
  355. 266 Exemption of non-cash vouchers for exempt benefits
  356. 267 Exemption of credit-tokens used for exempt benefits
  357. 268 Exemption of vouchers and tokens for incidental overnight expenses
  358. 269 Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle
  359. 270 Exemption for small gifts of vouchers and tokens from third parties
  360. 270A Limited exemption for qualifying childcare vouchers
  361. 270AA Meaning of “eligible employee”
  362. 270B Meaning of “relevant earnings amount” and “required time”
  363. 271 Limited exemption of removal benefits and expenses: general
  364. 272 Removal benefits and expenses to which section 271 applies
  365. 273 Conditions applicable to change of residence
  366. 274 Meaning of “the limitation day”
  367. 275 Meaning of “the employment change”
  368. 276 Meaning of “residence”, “former residence” and “new residence” etc.
  369. 277 Acquisition benefits and expenses
  370. 278 Abortive acquisition benefits and expenses
  371. 279 Disposal benefits and expenses
  372. 280 Transporting belongings
  373. 281 Travelling and subsistence
  374. 282 Exclusion from section 281 of benefits and expenses where deduction allowed
  375. 283 Exclusion from section 281 of taxable car and van facilities
  376. 284 Bridging loan expenses
  377. 285 Replacement of domestic goods
  378. 286 Power to amend sections 277 to 285
  379. 287 Limit on exemption
  380. 288 Limited exemption of certain bridging loans connected with employment moves
  381. 289 Relief for certain bridging loans not qualifying for exemption under section 288
  382. 289A Exemption for paid or reimbursed expenses
  383. 289B Approval to pay or reimburse expenses at a flat rate
  384. 289C Revocation of approvals
  385. 289D Exemption for other benefits
  386. 289E Anti-avoidance
  387. 290 Accommodation benefits of ministers of religion
  388. 290A Accommodation outgoings of lower-paid ministers of religion
  389. 290B Allowances paid to lower-paid ministers of religion in respect of accommodation outgoings
  390. 290C Provisions of benefits code not applicable to lower-paid ministers of religion
  391. 290D Meaning of “lower-paid employment as a minister of religion”
  392. 290E Calculation of earnings rate for a tax year
  393. 290F Extra amounts to be added in connection with a car
  394. 290G Related employments
  395. 291 Termination payments to MPs and others ceasing to hold office
  396. 292 Accommodation expenses of MPs
  397. 293 Overnight expenses of other elected representatives
  398. 293A UK travel and subsistence expenses of MPs
  399. 293B UK travel expenses of other elected representatives
  400. 294 European travel expenses of MPs and other representatives
  401. 295 Transport and subsistence for Government ministers etc.
  402. 295A Travel expenses of members of local authorities etc
  403. 296 Armed forces' leave travel facilities
  404. 297 Armed forces' food, drink and mess allowances
  405. 297A Armed forces: the Operational Allowance
  406. 297B Armed forces: the Council Tax Relief
  407. 297C Armed forces: Continuity of Education Allowance
  408. 297D Armed forces: accommodation allowances
  409. 298 Reserve and auxiliary forces' training allowances
  410. 299 Crown employees' foreign service allowances
  411. 299A Voluntary office-holders: compensation for lost employment income
  412. 299B Voluntary office-holders: payments in respect of expenses
  413. 300 Consuls
  414. 301 Official agents
  415. 302 Consular employees
  416. 303 Visiting forces etc
  417. 304 Experts seconded to European Commission
  418. 304A Experts seconded to other European Union bodies
  419. 305 Offshore oil and gas workers: mainland transfers
  420. 306 Miners etc: coal and allowances in lieu of coal
  421. 306A Carers: board and lodging
  422. 306B Limited exemption for sporting testimonial payments
  423. 307 Death or retirement benefit provision
  424. 308 Exemption of contributions to registered pension scheme
  425. 308A Exemption of contributions to overseas pension scheme
  426. 308B Independent advice in respect of conversions and transfers of pension scheme benefits
  427. 308C Provision of pensions advice: limited exemption
  428. 309 Limited exemptions for statutory redundancy payments
  429. 310 Counselling and other outplacement services
  430. 311 Retraining courses
  431. 312 Recovery of tax
  432. 312A Limited exemption for qualifying bonus payments
  433. 312B “Qualifying bonus payments”
  434. 312C Section 312B: the participation and equality requirements
  435. 312D Section 312B: the trading requirement
  436. 312E Section 312B: the indirect employee-ownership requirement
  437. 312F Section 312B: the office-holder requirement
  438. 312G “Service company”
  439. 312H Excluded payments
  440. 312I Interpretation of Chapter 10A
  441. 313 Repairs and alterations to living accommodation
  442. 314 Council tax etc. paid for certain living accommodation
  443. 315 Limited exemption for expenses connected with certain living accommodation
  444. 316 Accommodation, supplies and services used in employment duties
  445. 316ZA Accommodation, supplies and services used in employment duties: payment or reimbursement of expenses
  446. 316A Homeworker’s additional household expenses
  447. 317 Subsidised meals
  448. 318 Childcare: exemption for employer-provided care
  449. 318A Childcare: limited exemption for other care
  450. 318AZA Meaning of “eligible employee”
  451. 318AA Meaning of “relevant earnings amount” and “required time”
  452. 318B Childcare: meaning of “care”, “child” and “parental responsibility”
  453. 318C Childcare: meaning of “qualifying child care”
  454. 318D Childcare: power to vary amounts which are the exempt amount and qualifying conditions
  455. 319 Mobile telephones
  456. 320 Limited exemption for computer equipment
  457. 320A Eye tests and special corrective appliances
  458. 320B Health-screening and medical check-ups
  459. 320C Recommended medical treatment
  460. 320D Flu vaccinations
  461. 321 Suggestion awards
  462. 322 Suggestion awards: “the permitted maximum”
  463. 323 Long service awards
  464. 323A Trivial benefits provided by employers
  465. 323B Section 323A: calculation of available exempt amount
  466. 323C Power to amend sections 323A and 323B
  467. 324 Small gifts from third parties
  468. 325 Overseas medical treatment
  469. 325A Health and employment insurance payments
  470. 326 Expenses incidental to transfer of a kind not normally met by transferor
  471. 326A Fees relating to monitoring schemes relating to vulnerable persons
  472. 326B Advice relating to proposed employee shareholder agreements
  473. 327 Deductions from earnings: general
  474. 328 The income from which deductions may be made
  475. 329 Deductions from earnings not to exceed earnings
  476. 330 Prevention of double deductions
  477. 331 Order for making deductions
  478. 332 Meaning of “the deductibility provisions”
  479. 333 Scope of this Chapter: expenses paid by the employee
  480. 334 Effect of reimbursement etc.
  481. 335 Application of deductions provisions: “earnings charged on receipt” and “earnings charged on remittance”
  482. 336 Deductions for expenses: the general rule
  483. 337 Travel in performance of duties
  484. 338 Travel for necessary attendance
  485. 339 Meaning of “workplace” and “permanent workplace”
  486. 339A Travel for necessary attendance: employment intermediaries
  487. 340 Travel between group employments
  488. 340A Travel between linked employments
  489. 341 Travel at start or finish of overseas employment
  490. 342 Travel between employments where duties performed abroad
  491. 343 Deduction for professional membership fees
  492. 344 Deduction for annual subscriptions
  493. 345 Decisions of an officer of Revenue and Customs under section 344
  494. 346 Deduction for employee liabilities and expenses
  495. 347 Payments made after leaving the employment
  496. 348 Liabilities related to the employment
  497. 349 Meaning of “qualifying insurance contract”
  498. 350 Connected contracts
  499. 351 Expenses of ministers of religion
  500. 352 Limited deduction for agency fees paid by entertainers
  501. 353 Deductions from earnings charged on remittance
  502. 354 Disallowance of expenses relating to earnings taxed on different basis or untaxed
  503. 355 Deductions for corresponding payments by qualifying new resident employees with foreign employers
  504. 356 Disallowance of business entertainment and gifts expenses
  505. 357 Business entertainment and gifts: exception where employer’s expenses disallowed
  506. 358 Business entertainment and gifts: other exceptions
  507. 359 Disallowance of travel expenses: mileage allowances and reliefs
  508. 360 Disallowance of certain accommodation expenses of MPs and other representatives
  509. 360A Social security contributions
  510. 360B Additional household expenses
  511. 361 Scope of this Chapter: cost of benefits deductible as if paid by employee
  512. 362 Deductions where non-cash voucher provided
  513. 363 Deductions where credit-token provided
  514. 364 Deductions where living accommodation provided
  515. 365 Deductions where certain employment-related benefits provided
  516. 366 Scope of this Chapter: amounts fixed by Treasury
  517. 367 Fixed sum deductions for repairing and maintaining work equipment
  518. 368 Fixed sum deductions from earnings payable out of public revenue
  519. 369 Scope of this Chapter: earnings representing benefits or reimbursed expenses
  520. 370 Travel costs and expenses where duties performed abroad: employee’s travel
  521. 371 Travel costs and expenses where duties performed abroad: visiting spouse’s , civil partner's or child’s travel
  522. 372 Where seafarers' duties are performed
  523. 373 Non-resident or qualifying new resident employee’s travel costs and expenses where duties performed in UK
  524. 374 Non-resident or qualifying new resident employee’s spouse’s , civil partner's or child’s travel costs and expenses where duties performed in UK
  525. 375 Meaning of “qualifying arrival date”
  526. 376 Foreign accommodation and subsistence costs and expenses (overseas employments)
  527. 377 Costs and expenses in respect of personal security assets and services
  528. 378 Deduction from seafarers' earnings: eligibility
  529. 379 Calculating the deduction
  530. 380 Limit on deduction where UK duties etc. make amount unreasonable
  531. 381 Taking account of other deductions
  532. 382 Duties on board ship
  533. 383 Place of performance of incidental duties
  534. 384 Meaning of employment “as a seafarer”
  535. 385 Meaning of “ship”
  536. 393 Application of this Chapter
  537. 393A Employer-financed retirement benefits scheme
  538. 393B Relevant benefits
  539. 394 Charge on benefit to which this Chapter applies
  540. 394A Temporary non-residents
  541. 395 Reduction where employee has contributed
  542. 395A Benefits under old section 222 schemes not taxed by virtue of section 394
  543. 395B Exemption or reduction for foreign service
  544. 395C Meaning of “foreign service” in section 395B
  545. 396 Certain lump sums not taxed by virtue of section 394
  546. 397 Certain lump sums: calculation of amount taxed by virtue of section 394
  547. 398 Valuation of benefits
  548. 399 Employment-related loans: interest treated as paid
  549. 399A Responsible person
  550. 400 Interpretation
  551. 401 Application of this Chapter
  552. 402 Meaning of “benefit”
  553. 402A Split of payments and other benefits between sections 402B and 403
  554. 402B Termination awards not benefiting from threshold to be treated as earnings
  555. 402C The termination awards to which section 402B applies
  556. 402D “Post-employment notice pay”
  557. 402E Meaning of “trigger date” and “post-employment notice period” in section 402D
  558. 403 Charge on payment or other benefit where threshold applies
  559. 404 How the £30,000 threshold applies
  560. 404A Amounts charged to be treated as highest part of total income
  561. 404B Power to vary threshold
  562. 405 Exception for certain payments exempted when received as earnings
  563. 406 Exception for death or disability payments and benefits
  564. 407 Exception for payments and benefits under tax-exempt pension schemes
  565. 408 Exception for contributions to registered pension schemes
  566. 409 Exception for payments and benefits in respect of certain legal expenses etc and indemnity insurance
  567. 410 Exception for payments and benefits in respect of certain legal expenses etc and indemnity insurance: individual deceased
  568. 411 Exception for payments and benefits for forces
  569. 412 Exception for payments and benefits provided by foreign governments etc.
  570. 413 Exception in certain cases of foreign service
  571. 413A Exception for payment of certain legal costs
  572. 414 Reduction in other cases of foreign service
  573. 414A Exception for payments and benefits under section 615(3) schemes
  574. 414B Exception in certain cases of foreign service as seafarer
  575. 414C Reduction in other cases of foreign service as seafarer
  576. 415 Valuation of benefits
  577. 416 Notional interest treated as paid if amount charged for beneficial loan
  578. 417 Scope of Part 7
  579. 418 Other related provisions
  580. 419 Negative amounts treated as nil
  581. 420 Meaning of “securities” etc
  582. 421 Meaning of “market value” etc
  583. 421A Meaning of “consideration”
  584. 421B Application of Chapters 2 to 4A
  585. 421C Associated persons
  586. 421D Replacement and additional securities and changes in interests
  587. 421E Exclusions: residence etc
  588. 421F Exclusions: public offers
  589. 421G Exclusions: approved plan or scheme securities
  590. 421H Meaning of “employee-controlled” etc
  591. 421I Consideration for acquisition of employment-related securities
  592. 421J Duty to provide information
  593. 421JA Annual returns
  594. 421JB Returns to be given electronically
  595. 421JC Penalties for late returns
  596. 421JD Penalty if information not given correctly
  597. 421JE Assessment of penalties
  598. 421JF Appeals
  599. 421K Reportable events
  600. 421L Persons to whom section 421J applies
  601. 422 Application of this Chapter
  602. 423 “Restricted securities” and “restricted interest in securities”
  603. 424 Exceptions
  604. 425 No charge in respect of acquisition in certain cases
  605. 426 Charge on occurrence of chargeable event
  606. 427 Chargeable events
  607. 428 Amount of charge
  608. 428A Relief for secondary Class 1 contributions met by employee
  609. 429 Case outside charge under section 426
  610. 430 Election for outstanding restrictions to be ignored
  611. 430A Application of this Chapter where securities exchanged for further securities
  612. 431 Election for full or partial disapplication of this Chapter
  613. 431A Shares under tax advantaged plan or scheme
  614. 431B Securities acquired for purpose of avoidance
  615. 432 Definitions
  616. 435 Application of this Chapter
  617. 436 “Convertible securities”
  618. 437 Adjustment of charge
  619. 438 Charge on occurrence of chargeable event
  620. 439 Chargeable events
  621. 440 Amount of charge
  622. 441 Amount of gain realised on occurrence of chargeable event
  623. 442 Amount of consideration given for entitlement to convert
  624. 442A Relief for secondary Class 1 contributions met by employee
  625. 443 Case outside charge under section 438
  626. 444 Definitions
  627. 446A Application of this Chapter
  628. 446B Charge on acquisition
  629. 446C Amount of charge
  630. 446D Restricted securities and convertible securities
  631. 446E Charge on restricted securities
  632. 446F Adjustment of market value: conditional interests
  633. 446G Adjustment of market value: consideration for entitlement to convert
  634. 446H Adjustment of market value: charge on conversion
  635. 446I Adjustment of consideration or benefit received
  636. 446IA Disapplication of exceptions from charges
  637. 446J Definitions
  638. 446K Application of this Chapter
  639. 446L Charge on non-commercial increases
  640. 446M Securities subject to restriction on valuation date
  641. 446N Securities subject to restriction during relevant period
  642. 446NA Disapplication of exceptions from charges
  643. 446O “Relevant period” and “valuation date”
  644. 446P Definitions
  645. 446Q Application of this Chapter
  646. 446R Case outside this Chapter
  647. 446S Notional loan
  648. 446T Amount of notional loan
  649. 446U Discharge of notional loan
  650. 446UA Pre-acquisition avoidance cases
  651. 446V Chapter to be additional to other income tax charges
  652. 446W Definitions
  653. 446X Application of this Chapter
  654. 446Y Amount treated as income
  655. 446Z Definitions
  656. 447 Charge on other chargeable benefits from securities
  657. 448 Amount of charge
  658. 449 Case outside this Chapter
  659. 450 Definitions
  660. 451 Amount of charge
  661. 452 Cases outside charge under section 449
  662. 453 Charge on increase in value of shares of dependent subsidiary
  663. 454 Chargeable increases
  664. 455 Amount of charge
  665. 456 Cases outside charge under section 453
  666. 457 Charge on other chargeable benefits from shares
  667. 458 Chargeable benefits
  668. 459 Amount of charge
  669. 460 Cases outside charge under section 457
  670. 461 Related acquisitions of additional shares
  671. 462 Company reorganisations etc.
  672. 463 Disposals of shares to connected persons etc. ignored
  673. 464 Application to interests in shares
  674. 465 Duty to notify acquisitions of shares or interests in shares
  675. 466 Duty to notify chargeable events and chargeable benefits
  676. 467 Meaning of “dependent subsidiary”
  677. 468 Meaning of “employee-controlled”
  678. 469 Shares “held by outside shareholders”
  679. 470 Minor definitions
  680. 451 Application of this Chapter
  681. 452 Market value on acquisition
  682. 453 Taxable amount under Chapter 4
  683. 454 Deemed election for disapplication of Chapter 2
  684. 455 Disapplication of Chapter 3B
  685. 456 Meaning of “intellectual property” and “transfer”
  686. 457 Meaning of “research institution”
  687. 458 Meaning of “involved in research”
  688. 459 Transfer of intellectual property by controlled company
  689. 460 Definitions
  690. 471 Options to which this Chapter applies
  691. 472 Associated persons
  692. 473 Introduction to taxation of securities options
  693. 474 Cases where this Chapter does not apply
  694. 475 No charge in respect of acquisition of option
  695. 476 Charge on occurrence of chargeable event
  696. 477 Chargeable events
  697. 478 Amount of charge
  698. 479 Amount of gain realised on occurrence of chargeable event
  699. 480 Deductible amounts
  700. 481 Relief for secondary Class 1 contributions met by employee
  701. 482 Relief for special contribution met by employee
  702. 483 Application of this Chapter where option exchanged for another
  703. 484 Definitions
  704. 485 Application of this Chapter where share option exchanged for another
  705. 486 Duty to notify matters relating to share options
  706. 487 Minor definitions
  707. 488 ... Share incentive plans (SIPs)
  708. 489 Operation of tax advantages in connection with Schedule 2 SIP
  709. 490 No charge on award or acquisition of shares: general
  710. 491 No charge on award of shares as taxable benefit
  711. 492 No charge on partnership share money deducted from salary
  712. 493 No charge on acquisition of dividend shares
  713. 494 No charge on removal of restrictions applying to shares
  714. 495 No charge on increase in value of shares of dependent subsidiary
  715. 496 No charge on cash dividend retained for reinvestment
  716. 497 Limitations on charges on shares ceasing to be subject to plan
  717. 498 No charge on shares ceasing to be subject to plan in certain circumstances
  718. 499 No charge in respect of incidental expenditure
  719. 500 Operation of tax charges in connection with Schedule 2 SIP
  720. 501 Charge on capital receipts in respect of plan shares
  721. 502 Meaning of “capital receipt” in section 501
  722. 503 Charge on partnership share money paid over to employee
  723. 504 Charge on cancellation payments in respect of partnership share agreement
  724. 505 Charge on free or matching shares ceasing to be subject to plan
  725. 506 Charge on partnership shares ceasing to be subject to plan
  726. 507 Charge on disposal of beneficial interest during holding period
  727. 508 Identification of shares ceasing to be subject to plan
  728. 509 Modification of section 696 where charge on shares ceasing to be subject to plan
  729. 510 Payments by trustees to employer company on shares ceasing to be subject to plan
  730. 511 PAYE deductions to be made by trustees on shares ceasing to be subject to plan
  731. 512 Disposal of beneficial interest by participant
  732. 513 Capital receipts: payments by trustees to employer company
  733. 514 Capital receipts: PAYE deductions to be made by trustees
  734. 515 Tax advantages and charges under other Acts
  735. 516 ... SAYE option schemes
  736. 517 Share options to which this Chapter applies
  737. 518 No charge in respect of receipt of option
  738. 519 No charge in respect of exercise of option
  739. 520 No charge in respect of post-acquisition benefits
  740. 521 ... CSOP schemes
  741. 522 Share options to which this Chapter applies
  742. 523 No charge in respect of receipt of option
  743. 524 No charge in respect of receipt of option
  744. 525 No charge in respect of post-acquisition benefits
  745. 526 Charge where option granted at a discount
  746. 527 Enterprise management incentives: qualifying options
  747. 528 No charge on receipt of qualifying option
  748. 529 Scope of tax advantages: option must be exercised by the specified anniversary
  749. 530 No charge on exercise of option to acquire shares at market value
  750. 531 Limitation of charge on exercise of option to acquire shares below market value
  751. 532 Modified tax consequences following disqualifying events
  752. 533 Disqualifying events
  753. 534 Disqualifying events relating to relevant company
  754. 535 Disqualifying events relating to employee
  755. 536 Other disqualifying events
  756. 537 Alterations of share capital for purposes of section 536
  757. 538 Share conversions excluded for purposes of section 536
  758. 539 CSOP and other options relevant for purposes of section 536
  759. 540 No charge on acquisition of shares as taxable benefit
  760. 541 Effects on other income tax charges
  761. 542 Exemption: offer made to public and employees
  762. 543 Discount not covered by exemption in section 542
  763. 544 Exemption: different offers made to public and employees
  764. 545 Discount not covered by exemption in section 544
  765. 546 Meaning of being entitled “on similar terms”
  766. 547 Meaning and amount or value of “registrant discount”
  767. 548 Minor definitions
  768. 549 Application of this Chapter
  769. 550 Meaning of “employee benefit trust”
  770. 551 “Qualifying disposals” for purposes of section 550
  771. 552 Attribution of interest in company to beneficiary or associate
  772. 553 Meaning of “appropriate percentage” for purposes of section 552
  773. 554 Attribution of further interest in company
  774. 554A Application of Chapter 2 : main case
  775. 554AA Application of Chapter 2: close companies
  776. 554AB Meaning of “relevant transaction”
  777. 554AC Meaning of “excluded transaction”
  778. 554AD Section 554AA: meaning of “director”
  779. 554AE Section 554AA: meaning of “material interest”
  780. 554AF Section 554AA: supplementary
  781. 554B Relevant steps: earmarking etc of sum of money or asset
  782. 554C Relevant steps: payment of sum, transfer of asset etc
  783. 554D Relevant steps: making asset available
  784. 554E Exclusions: steps under certain schemes etc
  785. 554F Exclusions: commercial transactions
  786. 554G Exclusions: transactions under employee benefit packages
  787. 554H Exclusions: earmarking of deferred remuneration
  788. 554I Exclusions: introduction to sections 554J to 554M
  789. 554J Exclusions: earmarking for employee share schemes (1)
  790. 554K Exclusions: earmarking for employee share schemes (2)
  791. 554L Exclusions: earmarking for employee share schemes (3)
  792. 554M Exclusions: earmarking for employee share schemes (4)
  793. 554N Exclusions: other cases involving employment-related securities etc
  794. 554O Exclusions: employee car ownership schemes
  795. 554OA Exclusions: transfer of employment-related loans
  796. 554P Exclusions: employment income exemptions under Part 4
  797. 554Q Exclusions: income arising from earmarked sum or asset
  798. 554R Exclusions: acquisitions out of sums or assets
  799. 554RA Exclusions: relevant repayments
  800. 554S Exclusions: pension income chargeable under Part 9 etc
  801. 554T Exclusions: employee pension contributions
  802. 554U Exclusions: pre-6 April 2006 contributions to employer-financed retirement benefit schemes
  803. 554V Exclusions: purchases of annuities out of pension scheme rights
  804. 554W Exclusions: certain retirement benefits etc
  805. 554X Exclusions: transfers between certain foreign pension schemes
  806. 554XA Exclusions: payments in respect of a tax liability
  807. 554Y Power to exclude other relevant steps
  808. 554Z Interpretation: general
  809. 554Z1 Interpretation: persons linked with A
  810. 554Z2 Value of relevant step to count as employment income
  811. 554Z2A Exception to section 554Z2(1): close companies
  812. 554Z3 Value of relevant step
  813. 554Z4 Residence issues
  814. 554Z4A Temporary non-residents
  815. 554Z5 Overlap with money or asset subject to earlier tax liability
  816. 554Z6 Overlap with certain earnings
  817. 554Z7 Exercise price of share options
  818. 554Z8 Cases where consideration given for relevant step
  819. 554Z9 Remittance basis: A did not meet section 26A requirement
  820. 554Z10 Remittance basis: A met section 26A requirement
  821. 554Z11 Remittance basis: supplementary
  822. 554Z11A Temporary non-residents
  823. 554Z11B Earlier income tax liability: application of section 554Z11C
  824. 554Z11C Earlier income tax liability: treatment of payments
  825. 554Z11D Earlier income tax liability: provisional payments of tax
  826. 554Z11E Application for provisional payments to be treated as payment of tax
  827. 554Z11F Provisional payments of tax: further provision
  828. 554Z11G Earlier income tax liability: supplementary provision
  829. 554Z12 Relevant step taken after A's death etc
  830. 554Z13 Subsequent income tax liability
  831. 554Z14 Relief where earmarking not followed by further relevant step
  832. 554Z15 Location of employment duties
  833. 554Z16 Application etc
  834. 554Z17 Employer etc to be treated as relevant third person etc
  835. 554Z18 Earmarking etc
  836. 554Z19 Provision of security
  837. 554Z20 Valuation of step within section 554Z19
  838. 554Z21 Relief for earmarking or security not followed by contribution or relevant benefit
  839. 555 Former employee entitled to deduction in calculating net income
  840. 556 Deductible payments made outside the time limits allowed
  841. 556A Deductible payments made pursuant to tax avoidance arrangements
  842. 557 Deductible payments wholly or partly borne by the former employer etc.
  843. 558 Meaning of “deductible payment”
  844. 559 Liabilities related to the former employment
  845. 560 Meaning of “qualifying insurance contract”
  846. 561 Connected contracts
  847. 562 Meaning of “former employee” and “employment”
  848. 563 Other interpretation
  849. 564 Application of this Part to office-holders
  850. 565 Structure of Part 9
  851. 566 Nature of charge to tax on pension income and relevant definitions
  852. 567 Amount charged to tax
  853. 567A Cases in which Part 7A has applied to source of pension income
  854. 567B Cases where inheritance tax is paid in respect of pension death benefit
  855. 568 Person liable for tax
  856. 569 United Kingdom pensions
  857. 570 “Pension”: interpretation
  858. 571 Taxable pension income
  859. 572 Person liable for tax
  860. 572A Temporary non-residents
  861. 573 Foreign pensions
  862. 574 “Pension”: interpretation
  863. 574A “Pension”: relevant lump sums
  864. 575 Taxable pension income
  865. 576 Person liable for tax
  866. 576A Temporary non-residents
  867. 577 United Kingdom social security pensions
  868. 578 Taxable pension income
  869. 579 Person liable for tax
  870. 579A Pensions
  871. 579B Taxable pension income
  872. 579C Person liable for tax
  873. 579CZA Exemption for beneficiaries' income withdrawal in some cases
  874. 579CA Temporary non-residents
  875. 579CB Refund of overpaid inheritance tax treated as pension
  876. 579D Interpretation
  877. 590 Annuities
  878. 591 Taxable pension income
  879. 592 Person liable for tax
  880. 593 Unauthorised payments: application of section 583
  881. 594 Meaning of “former approved superannuation fund”
  882. 595 Annuities
  883. 596 Taxable pension income
  884. 597 Person liable for tax
  885. 598 Income withdrawals
  886. 599 Taxable pension income
  887. 600 Person liable for tax
  888. 601 Unauthorised personal pension payments
  889. 602 Taxable pension income
  890. 603 Person liable for tax
  891. 604 Meaning of “personal pension scheme” and related expressions
  892. 605 Annuities
  893. 606 Meaning of “retirement annuity contract”
  894. 607 Taxable pension income
  895. 608 Person liable for tax
  896. 609 Annuities for the benefit of dependants
  897. 610 Annuities under non-registered occupational pension schemes
  898. 611 Annuities in recognition of another’s services
  899. 611A Exemptions from sections 609 to 611
  900. 612 Taxable pension income: UK annuities
  901. 613 Taxable pension income: foreign annuities
  902. 614 Person liable for tax
  903. 615 Certain overseas government pensions paid in the United Kingdom
  904. 616 Taxable pension income
  905. 617 Deduction allowed from taxable pension income
  906. 618 Person liable for tax
  907. 619 The House of Commons Members' Fund
  908. 620 Meaning of “House of Commons Members' Fund”
  909. 621 Taxable pension income
  910. 622 Person liable for tax
  911. 623 Return of surplus employee additional voluntary contributions
  912. 624 Taxable pension income
  913. 625 Person liable for tax
  914. 626 Income tax treated as paid
  915. 627 Meaning of “grossing up”
  916. 628 Interpretation
  917. 629 Pre-1973 pensions paid under the Overseas Pensions Act 1973
  918. 630 Interpretation
  919. 631 Taxable pension income
  920. 632 Person liable for tax
  921. 633 Voluntary annual payments
  922. 634 Taxable pension income: UK voluntary annual payments
  923. 635 Taxable pension income: foreign voluntary annual payments
  924. 636 Person liable for tax
  925. 636A Exemptions and liabilities for certain lump sums under registered pension schemes
  926. 636AA Taxable lump sum death benefits
  927. 636B Trivial commutation and winding-up lump sums
  928. 636C Trivial commutation and winding-up lump sum death benefits
  929. 637 Introduction
  930. 637A Pension commencement lump sums
  931. 637B Pension commencement excess lump sums
  932. 637C Serious ill-health lump sums
  933. 637D Uncrystallised funds pension lump sums
  934. 637E Short service refund lump sum
  935. 637F Refund of excess contributions lump sums
  936. 637G Trivial commutation lump sums and winding-up lump sums
  937. 637H Defined benefits lump sum death benefits
  938. 637I Pension protection lump sum death benefits
  939. 637J Uncrystallised funds lump sum death benefits
  940. 637K Annuity protection lump sum death benefits
  941. 637L Drawdown pension fund lump sum death benefits
  942. 637M Flexi-access drawdown lump sum death benefits
  943. 637N Trivial commutation lump sum death benefits
  944. 637P Individual’s lump sum allowance
  945. 637Q Availability of individual’s lump sum allowance
  946. 637R Individual’s lump sum and death benefit allowance
  947. 637S Availability of individual’s lump sum and death benefit allowance
  948. 637T Availability of individual’s lump sum and death benefit allowance where multiple lump sum death benefits paid
  949. 637U Availability of individual’s allowances where lump sums or lump sum death benefits already paid by non-UK schemes
  950. 638 Awards for bravery
  951. 639 Pensions in respect of death due to military or war service
  952. 640 Exemption under section 639 where income withheld
  953. 640A Lump sums provided under armed forces early departure scheme
  954. 641 Wounds and disability pensions
  955. 642 Compensation for National-Socialist persecution
  956. 642A Netherlands Benefit Act for Victims of Persecution 1940-1945
  957. 643 Malawi, Trinidad and Tobago and Zambia government pensions
  958. 644 Pensions payable where employment ceased due to disablement
  959. 644A Health and employment insurance payments
  960. 645 Social security pensions: increases in respect of children
  961. 646 Former miners etc: coal and allowances in lieu of coal
  962. 646A Foreign pensions of consular employees
  963. 646B Registered schemes: beneficiaries' annuities from unused funds
  964. 646C Registered schemes: beneficiaries' annuities from drawdown funds
  965. 646D Non-registered schemes: beneficiaries' annuities from unused funds
  966. 646E Non-registered schemes: beneficiaries' annuities from drawdown funds
  967. 646F Interpretation of sections 646B to 646E
  968. 647 Introduction and meaning of “foreign residence condition” etc.
  969. 648 The Central African Pension Fund
  970. 649 Commonwealth government pensions
  971. 650 Oversea Superannuation Scheme
  972. 651 Overseas Pensions Act 1973
  973. 652 Overseas Service Act 1958
  974. 653 Overseas Service Pensions Fund
  975. 654 The Pensions (India, Pakistan and Burma) Act 1955
  976. 655 Structure of Part 10
  977. 656 Nature of charge to tax on social security income
  978. 657 Meaning of “social security income”, “taxable benefits” etc.
  979. 658 Amount charged to tax
  980. 659 Person liable for tax
  981. 660 Taxable benefits: UK benefits – Table A
  982. 661 Taxable social security income
  983. 662 Person liable for tax
  984. 663 Long-term incapacity benefit: previous entitlement to invalidity benefit
  985. 664 Short-term incapacity benefit not payable at the higher rate
  986. 665 Exempt unless payable to a person involved in a trade dispute
  987. 666 Child maintenance bonus
  988. 667 Amounts in excess of taxable maximum
  989. 668 Taxable maximum
  990. 669 Interpretation
  991. 670 Child maintenance bonus
  992. 671 Amounts in excess of taxable maximum
  993. 672 Taxable maximum: general
  994. 673 Taxable maximum: income-based jobseeker’s allowance
  995. 674 Taxable maximum: contribution-based jobseeker’s allowance
  996. 675 Interpretation
  997. 676 Increases in respect of children
  998. 677 UK social security benefits wholly exempt from tax: Table B
  999. 678 Taxable benefits: foreign benefits
  1000. 679 Taxable social security income
  1001. 680 Person liable for tax
  1002. 681 Taxable and other foreign benefits: exemptions
  1003. 681A Foreign benefits of consular employees
  1004. 681B High income child benefit charge
  1005. 681C The amount of the charge
  1006. 681D Extension of charge in cases where child not living with claimant
  1007. 681E Special cases
  1008. 681F Alteration of income limit etc by Treasury order
  1009. 681G Meaning of “partner”
  1010. 681H Other interpretation provisions
  1011. 681I Winter fuel payment charge
  1012. 681J Alteration of income limit by Treasury order
  1013. 682 Scope of this Part
  1014. 683 PAYE income
  1015. 684 PAYE regulations
  1016. 685 Tax tables
  1017. 686 Meaning of “payment”
  1018. 687 Payments by intermediary
  1019. 687A Payment of employment income under Part 7A
  1020. 688 Agency workers
  1021. 688A Managed service companies: recovery from other persons
  1022. 688AA Workers' services provided through intermediaries: recovery of PAYE
  1023. 688AB Workers’ providing services through intermediaries etc: cases where taxes already paid
  1024. 688B Travel expenses of workers providing services through intermediaries: recovery of unpaid tax
  1025. 689 Employee of non-UK employer
  1026. 689A Oil and gas workers on the continental shelf
  1027. 690 Internationally mobile employees
  1028. 690A Employer notification for internationally mobile employees
  1029. 690B Direction by HMRC in relation to internationally mobile employees
  1030. 690C Employees who were internationally mobile etc. before 2025-26
  1031. 690D Employer notification for qualifying new residents or treaty non-residents
  1032. 690E Direction by HMRC in relation to qualifying new residents or treaty non-residents
  1033. 691 Mobile UK workforce
  1034. 692 Organised arrangements for sharing tips
  1035. 693 Cash vouchers
  1036. 694 Non-cash vouchers
  1037. 695 Credit-tokens
  1038. 695A Employment income under Part 7A
  1039. 696 Readily convertible assets
  1040. 697 Enhancing the value of an asset
  1041. 698 PAYE: special charges on employment-related securities
  1042. 699 PAYE: conversion of shares
  1043. 700 PAYE: gains from securities options
  1044. 700A Employment-related securities etc: internationally mobile employees
  1045. 701 Meaning of “asset”
  1046. 702 Meaning of “readily convertible asset”
  1047. 703 Introduction
  1048. 704 Sums payable by employers under agreements
  1049. 705 Approximations allowed in calculations
  1050. 706 Exclusion of general earnings from income etc.
  1051. 707 Interpretation of this Chapter
  1052. 707A Provision of additional information to His Majesty’s Revenue and Customs
  1053. 708 PAYE repayments
  1054. 709 Additional provision for certain assessments
  1055. 710 Notional payments: accounting for tax
  1056. 711 Right to make a return
  1057. 712 Interpretation of this Part
  1058. 713 Donations to charity: payroll deduction scheme
  1059. 714 Meaning of “donations”
  1060. 715 Approval of schemes: regulation by Treasury
  1061. 716 Alteration of amounts by Treasury order
  1062. 716A Priority rule for dividends etc. of UK resident companies etc.
  1063. 716B Employment intermediaries to keep, preserve and provide information etc
  1064. 717 Orders and regulations made by Treasury or Commissioners
  1065. 718 Connected persons
  1066. 719 Meaning of “control”
  1067. 720 Meaning of “ an officer of Revenue and Customs ” etc.
  1068. 721 Other definitions
  1069. 722 Consequential amendments
  1070. 723 Commencement and transitional provisions and savings
  1071. 724 Repeals and revocations
  1072. 725 Citation
  1073. SCHEDULE 1 Abbreviations and defined expressions
  1074. SCHEDULE 2 ... share incentive plans
  1075. SCHEDULE 3 ... SAYE option schemes
  1076. SCHEDULE 4 ... CSOP schemes
  1077. SCHEDULE 5 Enterprise management incentives
  1078. SCHEDULE 6 Consequential Amendments
  1079. SCHEDULE 7 Transitionals and savings
  1080. SCHEDULE 8 Repeals and revocations

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1,080 provisions

191 Claim for relief to take account of event after assessment

(1) A claim may be made for relief in the following cases. (2) The first case is where— (a) the tax payable by an employee for a tax year in respect of a loan has been decided on the basis that, for the purposes of section 175 (benefit of taxable cheap loan treated as earnings), the whole or part of the interest payable on the loan for that year was not paid, and (b) it is subsequently paid. (3) The second case is where— (a) the tax payable by an employee for a tax year in respect of a loan has been decided on that basis that, for the purposes of section 188 (loan released or written off: amount treated as earnings), the loan has been released or written off in that year, and (b) the whole or part of the loan is subsequently repaid. (4) The third case is where— (a) the tax payable by an employee for a tax year in respect of a loan has been decided on the basis that— (i) section 288 (limited exemption of certain bridging loans connected with employment moves), and (ii) section 289 (relief for certain bridging loans not qualifying for exemption under section 288), will not apply because the condition in section 288(1)(b) (which requires that the limit on the exemption under section 287(1) has not been reached) will not be met, and (b) that condition is met. (5) Where a claim is made under this section the tax payable is to be adjusted accordingly.

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201 Employment-related benefits

(1) This Chapter applies to employment-related benefits. (2) In this Chapter— “benefit” means a benefit or facility of any kind; “employment-related benefit” means a benefit, other than an excluded benefit, which is provided in a tax year— for an employee, or for a member of an employee’s family or household, by reason of the employment. For the definition of “excluded benefit” see section 202. (3) A benefit provided by an employer is to be regarded as provided by reason of the employment unless— (a) the employer is an individual, and (b) the provision is made in the normal course of the employer’s domestic, family or personal relationships. (4) For the purposes of this Chapter it does not matter whether the employment is held at the time when the benefit is provided so long as it is held at some point in the tax year in which the benefit is provided. (5) References in this Chapter to an employee accordingly include a prospective or former employee.

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202 Excluded benefits

(1) A benefit is an “excluded benefit” for the purposes of this Chapter if— (a) any of Chapters 3 to 9 of the benefits code applies to the benefit, (b) any of those Chapters would apply to the benefit but for an exception, or (c) the benefit consists in the right to receive, or the prospect of receiving, sums treated as earnings under section 221 (payments where employee absent because of sickness or disability). (1A) But a benefit provided to an employee or member of an employee's family or household is to be taken not to be an excluded benefit by virtue of subsection (1)(c) so far as it is provided under optional remuneration arrangements. (2) In this section “exception”, in relation to the application of a Chapter of the benefits code to a benefit, means any enactment in the Chapter which provides that the Chapter does not apply to the benefit. But for this purpose section 86 (transport vouchers under pre-26th March 1982 arrangements) is not an exception.

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203 Cash equivalent of benefit treated as earnings

(1) The cash equivalent of an employment-related benefit is to be treated as earnings from the employment for the tax year in which it is provided. (2) The cash equivalent of an employment-related benefit is the cost of the benefit less any part of that cost made good by the employee , to the persons providing the benefit, on or before 6 July following the tax year in which it is provided. (3) The cost of an employment-related benefit is determined in accordance with section 204 unless— (a) section 205 provides that the cost is to be determined in accordance with that section, or (b) section 206 provides that the cost is to be determined in accordance with that section.

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203A Employment-related benefit provided under optional remuneration arrangements

(1) Where an employment-related benefit is provided pursuant to optional remuneration arrangements— (a) the relevant amount is to be treated as earnings from the employment for the tax year in which the benefit is provided, and (b) section 203(1) does not apply. (2) To find the relevant amount, first determine which (if any) is the greater of— (a) the cost of the employment-related benefit, and (b) the amount foregone with respect to the benefit (see section 69B). (3) If the cost of the employment-related benefit is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent (see section 203(2)). (4) Otherwise, the “relevant amount” is— (a) the amount foregone with respect to the employment-related benefit, less (b) any part of the cost of the benefit made good by the employee, to the persons providing the benefit, on or before 6 July following the tax year in which it is provided. (5) For the purposes of subsections (2) and (3), assume that the cost of the employment-related benefit is zero if the condition in subsection (6) is met. (6) The condition is that the employment-related benefit would be exempt from income tax but for section 228A (exclusion of certain exemptions). (7) Where it is necessary for the purposes of subsections (2)(b) and (4) to apportion an amount of earnings to the benefit provided in the tax year, the apportionment is to be made on a just and reasonable basis. In this subsection “earnings” is to be interpreted in accordance with section 69B(5).

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204 Cost of the benefit: basic rule

The cost of an employment-related benefit is the expense incurred in or in connection with provision of the benefit (including a proper proportion of any expense relating partly to provision of the benefit and partly to other matters).

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205 Cost of the benefit: asset made available without transfer

(1) The cost of an employment-related benefit (“the taxable benefit”) is determined in accordance with this section if— (a) the benefit consists in an asset being made available for private use, and (b) there is no transfer of the property in the asset. (1A) In this section and section 205A, “private use” means private use by the employee or a member of the employee's family or household. (1B) For the purposes of subsection (1) and sections 205A and 205B, an asset made available in a tax year for use by the employee or a member of the employee's family or household is to be treated as made available throughout the year for private use unless— (a) at all times in the year when it is available for use by the employee or a member of the employee's family or household, the terms under which it is made available prohibit private use, and (b) no private use is made of it in the year. (1C) The cost of the taxable benefit is— (a) the annual cost of the benefit determined in accordance with subsection (2), less (b) any amount required to be deducted by section 205A (deduction for periods when asset unavailable for private use). (1D) In certain cases, the cost of the taxable benefit is calculated under this section in accordance with section 205B (reduction of cost of taxable benefit where asset is shared). (2) The annual cost of the benefit is the higher of— (a) the annual value of the use of the asset, and (b) the annual amount of the sums, if any, paid by those providing the benefit by way of rent or hire charge for the asset, together with the amount of any additional expense. (3) For the purposes of subsection (2), the annual value of the use of an asset is— (a) in the case of land, its annual rental value; (b) in any other case, 20% of the market value of the asset at the time when those providing the taxable benefit first applied the asset in the provision of an employment-related benefit (whether or not the person provided with that benefit is also the person provided with the taxable benefit). If those providing the taxable benefit first applied the asset in the provision of an employment-related benefit before 6th April 1980, paragraph (b) is to be read as if the reference to 20% were a reference to 10%. (4) In this section “additional expense” means the expense incurred in or in connection with provision of the taxable benefit (including a proper proportion of any expense relating partly to provision of the benefit and partly to other matters), other than— (a) the expense of acquiring or producing the asset incurred by the person to whom the asset belongs, and (b) any rent or hire charge payable for the asset by those providing the asset. (5) Where the asset is an emergency vehicle, the expense of providing fuel for it in a tax year is not an additional expense by virtue of subsection (4) so long as— (a) the person incurring that expense incurs no expense in that tax year in the provision of fuel for the vehicle which is used for the employee's private travel (“private fuel expense”), or (b) all private fuel expense that the person does incur in that tax year is made good by the employee on or before 6 July following the tax year. (6) For the purposes of this section— “emergency vehicle” has the same meaning as in section 248A; “fuel” includes electrical energy; “private travel” means travelling the expenses of which, if incurred and paid by the employee, would not be deductible under Chapter 2 or 5 of Part 5.

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205A Deduction for periods when asset unavailable for private use

(1) A deduction is to be made under section 205(1C)(b) if the asset mentioned in section 205(1) has been unavailable for private use on any day during the tax year concerned. (2) For the purposes of this section an asset is “unavailable” for private use on any day if— (a) that day falls before the day on which the asset is first available to the employee, (b) that day falls after the day on which the asset is last available to the employee, (c) for more than 12 hours during that day the asset— (i) is not in a condition fit for use, (ii) is undergoing repair or maintenance, (iii) could not lawfully be used, (iv) is in the possession of a person who has a lien over it and who is not the employer, not a person connected with the employer, not the employee, not a member of the employee's family and not a member of the employee's household, or (v) is used in a way that is neither use by, nor use at the direction of, the employee or a member of the employee's family or household, or (d) on that day the employee— (i) uses the asset in the performance of the duties of the employment, and (ii) does not use the asset otherwise than in the performance of the duties of the employment. (3) The amount of the deduction is given by— U Y × A where— U is the number of days, in the tax year concerned, on which the asset is unavailable for private use, Y is the number of days in that year, and A is the annual cost of the benefit of the asset determined under section 205(2). (4) The reference in subsection (2)(a) to the time when the asset is first available to the employee is to the earliest time when the asset is made available, by reason of the employment and without any transfer of the property in it, for private use. (5) The reference in subsection (2)(b) to the time when the asset is last available to the employee is to the last time when the asset is made available, by reason of the employment and without any transfer of the property in it, for private use.

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205B Reduction of cost of taxable benefit where asset is shared

(1) This section applies where the cost of an employment-related benefit (“the taxable benefit”) is to be determined under section 205. (2) If, for the whole or part of the tax year concerned, the same asset is available for more than one employee's private use at the same time, the total of the amounts which are the cost of the taxable benefit for each of those employees is to be limited to the annual cost of the benefit of the asset determined in accordance with section 205(2). (3) The cost of the taxable benefit for each employee is determined by taking the amount given by section 205(1C) and then reducing that amount on a just and reasonable basis. (4) For the purposes of this section, an asset is available for an employee's private use if it is available for private use by the employee or a member of the employee's family or household.

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206 Cost of the benefit: transfer of used or depreciated asset

(1) The cost of an employment-related benefit is determined in accordance with this section if— (a) the benefit consists in the transfer of an asset, and (b) the asset has been used, or has depreciated, since the person transferring the asset (“the transferor”) acquired or produced it. (2) The cost of the benefit is the market value of the asset at the time of the transfer. (3) But the cost of the benefit (“the current benefit”) is the higher of the market value of the asset at the time of the transfer and the amount calculated in accordance with subsection (5) if— (a) the asset is not an excluded asset (see subsection (6)) , (b) the asset has previously been applied in the provision of a relevant employment-related benefit (whether or not the person provided with that benefit is also the transferee), and (c) the transferor first applied the asset in the provision of an employment-related benefit after 5th April 1980. (4) In this section “relevant employment-related benefit” means an employment-related benefit the cost of which was to be determined in accordance with section 205. (5) The amount referred to in subsection (3) is calculated in accordance with the following steps— Step 1 Determine the tax years in which the asset was applied in the provision of a relevant employment-related benefit (including, if appropriate, the current tax year). Step 2 Determine the cost of the benefit for each of those tax years in accordance with section 205. Step 3 Calculate the total of the amounts determined under step 2. Step 4 Calculate the market value of the asset at the time when the transferor first applied it in the provision of an employment-related benefit. Step 5 Deduct the total calculated under step 3 from the market value calculated under step 4. The result is the amount referred to in subsection (3). (6) An excluded asset is— (a) a car (within the meaning of Chapter 6), (b) computer equipment that has previously been applied as mentioned in subsection (3)(b) in circumstances in which the conditions set out in section 320 were met, or (c) a cycle or cyclist's safety equipment that has previously been so applied in circumstances in which the conditions set out in section 244 were met.

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207 Meaning of “annual rental value”

(1) For the purposes of this Chapter the “annual rental value” of land is the rent which might reasonably be expected to be obtained on a letting from year to year if— (a) the tenant undertook to pay all taxes, rates and charges usually paid by a tenant, and (b) the landlord undertook to bear the costs of the repairs and insurance and other expenses (if any) necessary for maintaining the land in a state to command the rent. (2) For the purposes of subsection (1) that rent— (a) is to be taken to be the amount that might reasonably be expected to be so obtained in respect of the letting, and (b) is to be calculated on the basis that the only amounts that may be deducted in respect of services provided by the landlord are amounts in respect of the cost to the landlord of providing any relevant services. (3) If the land is of a kind that might reasonably be expected to be let on terms under which— (a) the landlord is to provide any services which are either— (i) relevant services, or (ii) the repair, insurance or maintenance of any premises which do not form part of the land but belong to or are occupied by the landlord, and (b) amounts are payable in respect of the services in addition to the rent, the rent to be established under subsection (1) in respect of the land is to be increased under subsection (4). (4) That rent is to include— (a) where the services are relevant services, so much of the additional amounts as exceeds the cost to the landlord of providing the services; (b) where the services are within subsection (3)(a)(ii), the whole of the additional amounts. (5) In this section “relevant service” means a service other than the repair, insurance or maintenance of the land or of any other land.

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208 Meaning of “market value”

For the purposes of this Chapter the market value of an asset at any time is the price which the asset might reasonably be expected to fetch on a sale in the open market at that time.

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209 Meaning of “persons providing benefit”

For the purposes of this Chapter the persons providing a benefit are the person or persons at whose cost the benefit is provided.

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210 Power to exempt minor benefits

(1) The Treasury may make provision by regulations for exempting from the application of this Chapter such minor benefits as may be specified in the regulations. (2) An exemption conferred by such regulations is conditional on the benefit being made available to the employer’s employees generally on similar terms.

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211 Special rules for scholarships: introduction

(1) Sections 212 to 214 supplement the preceding provisions of this Chapter in the following ways— section 212 provides for certain scholarships provided under arrangements entered into by an employer or a connected person to be regarded as provided by reason of an employment; section 213 provides that this Chapter does not apply to certain scholarships provided under a trust fund or a scheme; section 214 provides a different method of determining the cost of an employment-related benefit if it consists in the provision of a scholarship from a trust fund. (2) Section 215 limits the extent to which section 776(1) of ITTOIA 2005 (exemption for scholarship income) applies to a scholarship whose provision constitutes an employment-related benefit. (3) In this section and sections 212 to 215 “scholarship” includes a bursary, exhibition or other similar educational endowment.

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212 Scholarships provided under arrangements entered into by employer or connected person

(1) A scholarship which is provided for a member of an employee’s family or household is to be regarded for the purposes of this Chapter as provided by reason of the employment if it is provided under arrangements entered into by— (a) the employer, or (b) a person connected with the employer. (2) Subsection (1) applies whether or not the arrangements require the employer or the connected person to contribute directly or indirectly to the cost of providing the scholarship. (3) A scholarship is not to be regarded as provided by reason of an employment by virtue of subsection (1) if— (a) the employer is an individual, and (b) the arrangements are made in the normal course of the employer’s domestic, family or personal relationships. (4) This section is without prejudice to section 201(3).

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213 Exception for certain scholarships under trusts or schemes

(1) This Chapter does not apply to an employment-related benefit consisting in the provision of a scholarship if conditions A, B, C and D are met. (2) Condition A is that the scholarship would not be regarded as provided by reason of the employment if section 201(3) and section 212 were disregarded. (3) Condition B is that the holder of the scholarship is a full-time student. (4) Condition C is that the scholarship is provided from a trust fund or under a scheme. (5) Condition D is that, in the tax year in which the scholarship is provided, not more than 25% of the total amount of relevant payments is attributable to scholarships provided by reason of a person’s employment. (6) For the purposes of conditions B and D “full-time student” means a person who is in full-time education at a university, college, school or other educational establishment. (7) For the purposes of condition D— “employment” includes any employment within the meaning of the employment income Parts (see section 4), whether or not it is a taxable employment under Part 2; “relevant payments” means the payments made from the fund or scheme mentioned in condition C in respect of scholarships held by full-time students.

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214 Scholarships: cost of the benefit

If an employment-related benefit consists in the provision of a scholarship from a trust fund— (a) section 204 does not apply, and (b) the cost of the benefit is the total of the payments made from the fund to the person holding the scholarship.

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215 Limitation of exemption for scholarship income in section 776(1) of ITTOIA 2005

If an employment-related benefit consists in the provision of a scholarship, section 776(1) of ITTOIA 2005 (exemption for scholarship income) applies only in relation to the holder of the scholarship.

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221 Payments where employee absent because of sickness or disability

(1) This section applies if— (a) an employee is absent from work because of sickness or disability, and (b) a qualifying sickness payment is made in respect of the employee’s absence from work. (2) But this section does not apply if the qualifying sickness payment constitutes earnings from the employment by virtue of any other provision. (3) The qualifying sickness payment is to be treated as earnings from the employment in respect of the period of absence. (4) If the qualifying sickness payment is made from funds to which the employer and the employer’s employees have made contributions, only the amount of the payment which it is just and reasonable to attribute to the employer’s contributions is treated as earnings under this section. (5) In this section “qualifying sickness payment” means a payment which meets conditions A and B. (6) Condition A is that the payment is made— (a) to the employee or to a member of the employee’s family, (b) to the order of such a person, or (c) to the benefit of such a person. (7) Condition B is that the payment is made— (a) by reason of the employment, and (b) as a result of arrangements entered into by the employer.

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222 Payments by employer on account of tax where deduction not possible

(1) This section applies if— (a) an employer is treated by virtue of sections 687, 687A, 689 , 689A and 693 to 700 as having made a payment of income of an employee (“the notional payment”), (b) the employer is required by virtue of section 710(4) to account to an officer of Revenue and Customs for an amount of income tax (“the due amount”) in respect of the notional payment, and (c) the employee does not, before the end of the period of 90 days after the end of the tax year in which the relevant date falls, make good the due amount to the employer. (2) The due amount is to be treated as earnings from the employment for the tax year in which the relevant date falls. (3) In this section “employer”, in relation to any provision of sections 687, 687A, 689, 693 to 700 or 710, means the person taken to be the employer for the purposes of that provision. It also includes a person who is treated as making a payment of PAYE income by virtue of section 689(2) (payments by person for whom employee works but who is not the employer) or section 689A(3) (deemed payments of PAYE income of continental shelf workers by person other than employer) . (4) In this section “the relevant date” means— (a) if the employer is treated by virtue of any Act as making the notional payment before the date on which the Act is passed, that date, and (b) in any other case, the date on which the employer is treated as making the notional payment.

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223 Payments on account of director’s tax other than by the director

(1) This section applies if in a tax year— (a) a person (“P”) makes a payment to another person who is employed as the director of a company, (b) the payment is of, or on account of, earnings from the director’s employment, (c) PAYE regulations require P to deduct an amount of income tax (“the deductible tax”), (d) P deducts none, or only some, of the deductible tax, and (e) either or both of the following occur— (i) P accounts to the Commissioners for Her Majesty’s Revenue and Customs for some or all of the deductible tax (whether or not P has actually deducted the amount accounted for); (ii) one or more persons other than P (apart from the director) account to the Commissioners for Her Majesty’s Revenue and Customs for some or all of the deductible tax. (2) For the purposes of this section it does not matter whether the director’s employment is held at the time when P makes the payment mentioned in subsection (1)(a) so long as it is held at some point in the tax year in which the payment is made. (3) References in this section to employment as a director accordingly include prospective or past employment as a director. (4) The deductible tax accounted for to the Commissioners for Her Majesty’s Revenue and Customs is to be treated as earnings of the director from the director’s employment for the tax year in which it is accounted for. (5) But if— (a) the deductible tax is accounted for after the director’s employment has ceased, and (b) the employment ceased in a tax year before the one in which the deductible tax is accounted for, the deductible tax is treated as earnings for the tax year in which the director’s employment ceased. (6) The following rules apply to the calculation of the amount to be treated as earnings under this section— (a) any amount accounted for after the death of the director is to be disregarded; (b) if P deducts some of the deductible tax, the amount treated as earnings is reduced by the amount deducted; (c) if the director makes good to P or to another person some or all of the deductible tax which P or the other person accounts for, the amount treated as earnings is reduced by the amount made good. (7) This section does not apply if the director has no material interest in the company and either— (a) the director is employed as a full-time working director of the company, or (b) the company is— (i) non-profit-making, or (ii) a charitable company . (8) In this section— “director” has the same meaning as in the benefits code (see section 67); “director’s employment”, in relation to a person who is employed as a director, means that employment; “full-time working director” has the same meaning as in the benefits code (see section 67); “material interest” has the same meaning as in the benefits code (see section 68); “non-profit-making”, in relation to a company, means that— the company does not carry on a trade, and its functions do not consist wholly or mainly in the holding of investments or other property.

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224 Payments to non-approved personal pension arrangements

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225 Payments for restrictive undertakings

(1) This section applies where— (a) an individual gives a restrictive undertaking in connection with the individual’s current, future or past employment, and (b) a payment is made in respect of— (i) the giving of the undertaking, or (ii) the total or partial fulfilment of the undertaking. (2) It does not matter to whom the payment is made. (3) The payment is to be treated as earnings from the employment for the tax year in which it is made. (4) Subsection (3) does not apply if the payment constitutes earnings from the employment by virtue of any other provision. (5) A payment made after the death of the individual who gave the undertaking is treated for the purposes of this section as having been made immediately before the death. (6) This section only applies where— (a) if there are general earnings from the employment that are earned in, or otherwise in respect of, the tax year mentioned in subsection (3), subsection (7) applies to any of those general earnings, or (b) it is reasonable to assume that, if there were such general earnings, subsection (7) would apply to any of those general earnings. (7) This subsection applies to general earnings if either— (a) section 15 applies to the general earnings and the general earnings are not— (i) qualifying foreign general earnings within the meaning of section 41T (qualifying foreign general earnings), or (ii) general earnings to which section 22 or section 26 would apply if the individual made a claim under section 809B of ITA 2007 (claim for the remittance basis) for the tax year mentioned in section 22(1) or 26(1) (being a tax year before tax year 2025-26), or (b) section 27 applies to the general earnings. (8) In this section “restrictive undertaking” means an undertaking which restricts the individual’s conduct or activities. For this purpose it does not matter whether or not the undertaking is legally enforceable or is qualified.

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226 Valuable consideration given for restrictive undertakings

(1) In a case where— (a) an individual gives a restrictive undertaking in connection with the individual’s current, future or past employment, and (b) valuable consideration that is not in the form of money is provided in respect of— (i) the giving of the undertaking, or (ii) the total or partial fulfilment of the undertaking, section 225 applies as it would if a payment of an amount equal to the value of the consideration had been made instead. (2) For this purpose— (a) merely assuming an obligation to make over or provide valuable property, rights or advantages is not valuable consideration, but (b) wholly or partially discharging such an obligation is.

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226A Amount treated as earnings

(1) This section applies if shares having a market value of no less than £2000 are acquired by an employee in consideration of an employee shareholder agreement. (2) An amount equal to the market value of the shares is to be treated as earnings from the employment, in respect of the acquisition of the shares, for the tax year in which they are acquired. But this is subject to subsection (4). (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) If the shares are acquired pursuant to an employment-related securities option, subsection (2) does not apply. (5) If subsection (2) applies, nothing else constitutes earnings under this Part from the employment in respect of the acquisition of the shares. (6) For the purposes of this section ...— shares are “acquired” by an employee if the employee becomes beneficially entitled to them (and they are acquired at the time when the employee becomes so entitled); “employee shareholder agreement” means an agreement by virtue of which an employee is an employee shareholder (see section 205A(1)(a) to (d) of the Employment Rights Act 1996); “employee shareholder share” means a share acquired by an employee in consideration of an employee shareholder agreement; “employee” and “employer company”, in relation to an employee shareholder agreement, mean the individual and the company which enter into the agreement; “employment-related securities option” has the same meaning as in Chapter 5 of Part 7 (see section 471(5)); “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act; and the market value of shares is their market value on the day on which they are acquired (but see also subsection (7)). (7) For the purposes of subsection (1) (but not subsection (2)) , the market value of the shares is to be determined ignoring— (a) any election under section 431 (election for market value of restricted shares to be calculated as if not restricted), and (b) section 437 (market value of convertible securities to be determined as if not convertible).

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226C Only one payment deemed to be made under associated agreements

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226E Sporting testimonial payments

(1) This section applies in relation to an individual who is or has been employed as a professional sportsperson (“S”). (2) In this section “sporting testimonial” means— (a) a series of relevant events or activities which each have the same controller, or (b) a single relevant event or activity not forming part of such a series. (3) An event or activity is (subject to subsection (4)(b)) a relevant event or activity if— (a) its purpose (or one of its purposes) is to raise money for or for the benefit of S, and (b) the only or main reason for doing that is to recognise S's service as a professional sportsperson who is or has been employed as such. (4) An activity that meets the conditions in subsection (3)(a) and (b) and consists solely of inviting and collecting donations for or for the benefit of S— (a) is a relevant activity if it is one of a series of relevant events or activities for the purposes of subsection (2)(a), but (b) is not a relevant activity for the purposes of subsection (2)(b) so long as both conditions in subsection (5) are met while the activity takes place. (5) The conditions are— (a) that any person who is responsible (alone or with others) for collecting the donations or who is the controller (or a member of a committee which is the controller) of the activity is not— (i) S, (ii) a person who is (or has been) the controller of any other relevant event or activity for or for the benefit of S, (iii) a person connected with S or a person mentioned in sub-paragraph (ii), (iv) a person acting for or on behalf of a person mentioned in sub-paragraphs (i) to (iii), and (b) that the donations collected do not include any sums paid (directly or indirectly) out of money raised by any other relevant event or activity. (6) A “sporting testimonial payment” is a payment made by (or on behalf of) the controller of a sporting testimonial out of money raised for or for the benefit of S which— (a) is made to S, to a member of S's family or household, to a prescribed person, to S's order or otherwise for S's benefit, and (b) does not (apart from this section) constitute earnings from an employment. (7) A sporting testimonial payment is to be treated as earnings of S from the employment or former employment to which the sporting testimonial is most closely linked. (8) For the purposes of this section if at any material time S is dead— (a) anything done for or for the benefit of S's estate is to be regarded as done for or for the benefit of S; and (b) a payment made to S's personal representatives or to their order is to be treated as a payment to S or to S's order. (9) In this section— “controller”, in relation to an event or activity which meets the conditions in subsection (3)(a) and (b), means the person who controls the disbursement of any money raised for or for the benefit of S from that event or activity, “money” includes money's worth and “payment” includes the transfer of money's worth or the provision of any benefit, “prescribed person” means a person prescribed in regulations made by the Treasury. (10) Section 993 of ITA 2007 (meaning of “connected” persons) has effect for the purposes of this section.

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227 Scope of Part 4

(1) This Part contains— (a) earnings-only exemptions, and (b) employment income exemptions. (2) In this Act “earnings-only exemption” means an exemption from income tax which— (a) prevents liability to tax arising in respect of earnings, either by virtue of one or more particular provisions (such as a Chapter of the benefits code) or at all, and (b) does not prevent liability to tax arising in respect of other employment income. (3) In this Act “employment income exemption” means an exemption from income tax which prevents liability to tax arising in respect of employment income of any kind at all. (4) The following provisions in Part 7 also confer exemption from liability to income tax in respect of earnings— (za) section 418(1A) (acquisition of, and chargeable events occurring in relation to, employment-related securities options); (a) section 425 (restricted securities: no charge in respect of acquisition in certain circumstances), (b) section 475 (no charge in respect of acquisition of securities option), (c) sections 489 to 493 and sections 496 to 499 (... share incentive plans), (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) section 519 (... SAYE option schemes: no charge in respect of exercise of option), (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) section 524 (... CSOP schemes: no charge in respect of exercise of option), (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (i) section 542 (priority share allocations: exemption where offer made to public and employees), and (j) section 544 (priority share allocations: exemption where different offers made to public and employees). (5) In relation to the interaction between this Part and Part 7A, see section 554P(1).

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228 Effect of exemptions on liability under provisions outside Part 2

(1) The exemptions conferred by the provisions specified in subsection (2) prevent liability to income tax arising under any enactment, but the other exemptions in this Part only affect liability to income tax under Part 2 of this Act. (2) The provisions referred to in subsection (1) are— (a) section 245 (travelling and subsistence during public transport strikes), (b) section 248 (transport home: late night working and failure of car-sharing arrangements), (c) section 264 (annual parties and functions), (d) Chapter 8 of this Part (exemptions for special kinds of employees) except for sections 290, 290C to 291 and 306A , (da) section 308B (independent advice in respect of conversions and transfers of pension scheme benefits), (db) section 308C (provision of pensions advice), (e) section 323 (long service awards), (f) section 324 (small gifts from third parties), and (g) section 326 (expenses incidental to transfer of a kind not normally met by transferor).

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228A General exclusion from exemptions: optional remuneration arrangements

(1) A relevant exemption does not apply (whether to prevent liability to income tax from arising or to reduce liability to income tax) in respect of a benefit or facility so far as the benefit or facility is provided pursuant to optional remuneration arrangements. (2) For the purposes of subsection (1) it does not matter whether the relevant exemption would (apart from that subsection) have effect as an employment income exemption or an earnings-only exemption. (3) For the purposes of this section an exemption conferred by this Part is a “relevant exemption” unless it is— (a) a special case exemption (see subsection (4)), or (b) an excluded exemption (see subsection (5)). (4) “Special case exemption” means an exemption conferred by any of the following provisions— (a) section 289A (exemption for paid or reimbursed expenses); (b) section 289D (exemption for other benefits); (c) section 308B (independent advice in respect of conversions and transfers of pension scheme benefits); (d) section 312A (limited exemption for qualifying bonus payments); (e) section 317 (subsidised meals); (f) section 320C (recommended medical treatment); (g) section 323A (trivial benefits provided by employers). (5) “Excluded exemption” means an exemption conferred by any of the following provisions— (a) section 239 (payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles); (b) section 244 (cycles and cyclist's safety equipment); (c) section 266(2)(c) (non-cash voucher regarding entitlement to exemption within section 244); (d) section 270A (limited exemption for qualifying childcare vouchers); (e) section 307 (death or retirement provision), so far as relating to provision made for retirement benefits; (f) section 308 (exemption of contribution to registered pension scheme); (g) section 308A (exemption of contributions to overseas pension scheme); (h) section 308C (provision of pensions advice); (i) section 309 (limited exemptions for statutory redundancy payments); (j) section 310 (counselling and other outplacement services); (k) section 311 (retraining courses); (l) section 318 (childcare: exemption for employer-provided care); (m) section 318A (childcare: limited exemption for other care). (6) In subsection (5) “retirement benefit” has the meaning that would be given by subsection (2) of section 307 if “or death” were omitted in both places where it occurs in that subsection. (7) In this section “benefit or facility” includes anything which constitutes employment income or in respect of which employment income is treated as arising to the employee (regardless of its form and the manner of providing it). (8) In this section “optional remuneration arrangements” has the same meaning as in the benefits code (see section 69A). (9) The Treasury may by order amend subsections (4) and (5) by adding or removing an exemption conferred by Part 4.

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229 Mileage allowance payments

(1) No liability to income tax arises in respect of approved mileage allowance payments for a vehicle to which this Chapter applies (see section 235). (2) Mileage allowance payments are amounts, other than passenger payments (see section 233), paid to an employee for expenses related to the employee’s use of such a vehicle for business travel (see sections 235A and 236(1)). (3) Mileage allowance payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee for the kind of vehicle in question does not exceed the approved amount for such payments applicable to that kind of vehicle (see section 230). (4) Subsection (1) does not apply if— (a) the employee is a passenger in the vehicle, or (b) the vehicle is a company vehicle (see section 236(2)).

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230 The approved amount for mileage allowance payments

(1) The approved amount for mileage allowance payments that is applicable to a kind of vehicle is— M × R where— M is the number of miles of business travel by the employee (other than as a passenger) using that kind of vehicle in the tax year in question; R is the rate applicable to that kind of vehicle. (2) The rates applicable are as follows— Table Kind of vehicle | Rate per mile Car or van | 55p for the first 10,000 miles 25p after that Motor cycle | 24p Cycle | 20p (3) The reference in subsection (2) to “the first 10,000 miles” is to the total number of miles of business travel in relation to the employment, or any associated employment, by car or van in the tax year in question. (4) One employment is associated with another if— (a) the employer is the same; (b) the employers are partnerships or bodies and an individual or another partnership or body has control over both of them; or (c) the employers are associated companies within the meaning given by section 449 of CTA 2010. (5) In subsection (4)(b)— (a) “control”, in relation to a body corporate or partnership, has the meaning given by section 995 of ITA 2007 (in accordance with section 719 of this Act), and (b) the definition of “control” in that section of that Act applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate. (6) The Treasury may by regulations amend subsection (2) so as to alter the rates or rate bands.

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231 Mileage allowance relief

(1) An employee is entitled to mileage allowance relief for a tax year— (a) if the employee uses a vehicle to which this Chapter applies for business travel, and (b) the total amount of all mileage allowance payments, if any, made to the employee for the kind of vehicle in question for the tax year is less than the approved amount for such payments applicable to that kind of vehicle. (2) The amount of mileage allowance relief to which an employee is entitled for a tax year is the difference between— (a) the total amount of all mileage allowance payments, if any, made to the employee for the kind of vehicle in question, and (b) the approved amount for such payments applicable to that kind of vehicle. (3) Subsection (1) does not apply if— (a) the employee is a passenger in the vehicle, or (b) the vehicle is a company vehicle.

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232 Giving effect to mileage allowance relief

(1) A deduction is allowed for mileage allowance relief to which an employee is entitled for a tax year. (2) If any of the employee’s earnings— (a) are taxable earnings in the tax year in which the employee receives them, and (b) are not also taxable earnings in that year that fall within subsection (3), the relief is allowed as a deduction from those earnings in calculating net taxable earnings in the year. (3) If any of the employee’s earnings are taxable earnings in the tax year in which the employee remits them to the United Kingdom, there may be deducted from those earnings the amount of any mileage allowance relief— (a) for that tax year, and (b) for any earlier tax year in which the employee was resident in the United Kingdom, which, on the assumptions mentioned in subsection (4), would have been deductible under subsection (2). (4) The assumptions are— (a) that subsection (2)(b) does not apply, and (b) where applicable, that the earnings constitute taxable earnings in the tax year in which the employee receives them. (5) Subsection (3) applies only to the extent that the mileage allowance relief cannot be deducted under subsection (2). (6) A deduction shall not be made twice, whether under subsection (2) or (3), in respect of the same mileage allowance relief. (6A) If the earnings from which a deduction allowed under this section is deductible include earnings that are “excluded” within the meaning of section 15(1A)— (a) the amount of the deduction allowed is a proportion of the amount that would be allowed under this section if the tax year were not a split year, and (b) that proportion is equal to the proportion that the part of the earnings that is not “excluded” bears to the total earnings. (7) In this section “taxable earnings” or “net taxable earnings” means taxable earnings or net taxable earnings from the employment for the purposes of Part 2.

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233 Passenger payments

(1) No liability to income tax arises in respect of approved passenger payments made to an employee for the use of a car or van (whether or not it is a company vehicle) if— (a) the employee receives mileage allowance payments for the use of the car or van, and (b) the cash equivalent of the benefit of the car or van is treated as earnings from the employment by virtue of section 120 or 154 (cars and vans as benefits). This is subject to subsection (2). (2) The condition in subsection (1)(b) needs to be met only if the car or van is made available to the employee by reason of the employment. (3) Passenger payments are amounts paid to an employee because, while using a car or van for business travel, the employee carries in it one or more passengers who are also employees for whom the travel is business travel. (4) Passenger payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee does not exceed the approved amount for such payments (see section 234). (5) Section 117 (when cars and vans are made available by reason of employment) applies for the purposes of subsection (2).

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234 The approved amount for passenger payments

(1) The approved amount for passenger payments is— M × R where— M is the number of miles of business travel by the employee by car or van— (a) for which the employee carries in the tax year in question one or more passengers who are also employees for whom the travel is business travel, and (b) in respect of which passenger payments are made; R is a rate of 5p per mile. (2) If the employee carries for all or part of the tax year two or more passengers who are also employees for whom the travel is business travel, the approved amount for passenger payments is the total of the amounts calculated separately under subsection (1) in respect of each of those passengers. (3) The Treasury may by regulations amend subsection (1) so as to alter the rate.

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235 Vehicles to which this Chapter applies

(1) This Chapter applies to cars, vans, motor cycles and cycles. (2) “Car” means a mechanically propelled road vehicle which is not— (a) a goods vehicle, (b) a motor cycle, or (c) a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used. (3) “Van” means a mechanically propelled road vehicle which— (a) is a goods vehicle, and (b) has a design weight not exceeding 3,500 kilograms, and which is not a motor cycle. (4) “Motor cycle” has the meaning given by section 185(1) of the Road Traffic Act 1988 (c. 52). (5) “Cycle” has the meaning given by section 192(1) of that Act. (6) In this section— “design weight” means the weight which a vehicle is designed or adapted not to exceed when in normal use and travelling on a road laden; “goods vehicle” means a vehicle of a construction primarily suited for the conveyance of goods or burden of any description.

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235A Journeys made by members of local authorities etc

(1) Subject to subsections (2) and (3), a qualifying journey made by a member of a relevant authority is to be treated as business travel for the purposes of this Chapter if a qualifying payment is made by the authority— (a) to the member for expenses related to the member's use for the journey of a vehicle to which this Chapter applies, or (b) to another member of the authority for carrying the member as a passenger on the journey in a car or van. (2) A qualifying journey is not to be treated as business travel— (a) for the purposes of section 231, or (b) when calculating for the purposes of that section the mileage allowance payments paid to the member in respect of the journey and the approved amount for such payments. (3) If a journey made by a member of a relevant authority is a qualifying journey and a qualifying payment is made to the member for carrying a passenger on the journey, the member's journey is not to be treated as business travel in respect of that passenger for the purposes of sections 233 and 234 unless the passenger is also a member of the authority. (4) A journey made by a member of a relevant authority is a “qualifying journey” for the purposes of this section if— (a) it is a journey between the member's home and permanent workplace, and (b) the member's home is situated in the area of the authority, or no more than 20 miles outside the boundary of the area. (5) In this section “permanent workplace” has the same meaning as in Part 5 (see section 339). (6) The Treasury may by regulations— (a) provide for bodies specified in the regulations (which must be local authorities or bodies that have similar or related functions or purposes) to be relevant authorities for the purposes of this section, (b) provide for references in this section to a member of a relevant authority to be read as references to a member of a description prescribed in the regulations, and (c) define what is meant by “qualifying payment” for the purposes of this section. (7) The regulations may contain transitional provision and savings.

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236 Interpretation of this Chapter

(1) In this Chapter— “business travel” means travelling the expenses of which, if incurred and paid by the employee in question, would (if this Chapter did not apply) be deductible under sections 337 to 342; “mileage allowance payments” has the meaning given by section 229(2); “passenger payments” has the meaning given by section 233(3). (1A) For journeys that are treated as business travel for the purposes of certain provisions of this Chapter, see section 235A (journeys made by members of local authorities etc). (2) For the purposes of this Chapter a vehicle is a “company vehicle” in a tax year if in that year— (a) the vehicle is made available to the employee by reason of the employment and is not available for the employee’s private use, or (b) an amount in respect of the benefit of the vehicle is to be treated as the employee’s earnings for the tax year by virtue of— (i) section 120 or 120A (benefit of car treated as earnings), (ii) section 154 or 154A (benefit of van treated as earnings), or (iii) section 203 or 203A (residual liability to charge: benefit treated as earnings), or (c) in the case of a car or van, an amount in respect of the benefit of the car or van would be required to be so treated if sections 167 and 168 (exceptions for pooled cars and vans) and section 248A (emergency vehicles) did not apply, or (d) in the case of a cycle, the cash equivalent of the benefit of the cycle would be required to be treated as the employee’s earnings for the tax year under Chapter 10 of Part 3 (taxable benefits: residual liability to charge) if section 244(1) (exception for cycles made available) did not apply. (3) Sections 117 and 118 (when cars and vans are made available by reason of employment and are made available for private use) apply for the purposes of subsection (2).

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