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.
(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.
(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.
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.
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).
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).
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.
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.
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.
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.
(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.
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.
(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.
(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.
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).
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.
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.
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.
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.
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.
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.
(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.
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.
(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).
(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.
(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).
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).
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.
(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)).
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.
(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.
(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.
(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).
(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.
(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.
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.
(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).