(1) This section applies if in any case at least one relevant person in a chain participates in a relevant avoidance arrangement.
(2) An arrangement is a “relevant avoidance arrangement” if its main purpose, or one of its main purposes, is to secure a tax advantage by securing that at least one of the conditions mentioned in section 61O or 61P is not met in relation to an intermediary.
(3) Section 61N(3) has effect as if the reference to the fee-payer were a reference to the participating person, but—
(a) section 61N(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and
(b) Step 1 of section 61Q(1) continues to have effect as referring to the chain payment made by the deemed employer.
(4) The participating person is—
(a) in a case where only one relevant person participates in the arrangement, that person;
(b) in any other case the highest relevant person in the chain who participated in the arrangement and from whom HMRC considers there is a realistic prospect of recovering, within a reasonable period, the amount of tax that would have been paid (or not repaid) in the absence of the arrangement.
(5) Subsection (3) has effect even though that may involve a participating person being treated as both employer and employee in relation to the deemed employment under section 61N(3).
(6) In this section—
“arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“deemed employer” means a person who would, but for this section, be treated by section 61N(3) as making a payment to the worker;
“relevant person” means—
the worker;
a person who is resident in the United Kingdom or who has a place of business in the United Kingdom;
“tax” means income tax (and “tax advantage” is to be construed accordingly”);
“tax advantage” includes—
avoidance or reduction of a charge to tax or an assessment to tax,
repayment or increased repayment of tax,
avoidance of a possible assessment to tax, and
deferral of a payment of tax or advancement of a repayment of tax.
In this Chapter—
“associate” has the meaning given by section 60;
“company” means a body corporate or unincorporated association, and does not include a partnership;
“engagement to which Chapter 8 applies” has the meaning given by section 49(5).
61Y Umbrella companies: joint and several liability
(1) Subsection (2) applies if—
(a) an individual (“the worker”) personally provides services, or enters into arrangements with a view to personally providing services, to another person (“the client”),
(b) the worker is employed by a third person (“the umbrella company”)—
(i) that carries on a business (whether or not with a view to profit and whether or not in conjunction with any other business) of supplying labour, and
(ii) that is not a company in which the worker has a material interest, and
(c) the umbrella company arrangements conditions are met.
(2) Each relevant party (see section 61Z) is, along with the umbrella company, jointly and severally liable to pay any amount payable, in accordance with the PAYE provisions, by the umbrella company in relation to a qualifying umbrella company payment.
(3) A “qualifying umbrella company payment” means a payment made in respect of the employment of the worker to the extent that it is not in respect of the provision of services to a person other than the client.
(4) The umbrella company arrangements conditions are that—
(a) there is a contract between the umbrella company and—
(i) the client, or
(ii) another person,
(b) under or in consequence of the contract—
(i) the services are provided, or
(ii) the umbrella company is paid, or otherwise provided with consideration, for the services, and
(c) if the contract is not between the umbrella company and the client—
(i) there is a contract between the client and another person,
(ii) the provision of the services or of payment or other consideration for the services is also a consequence of that other contract (whether directly or as a result of a series of contracts involving other persons).
(5) For the purposes of subsection (1)(b)(ii)—
(a) “material interest”, in relation to a company, means—
(i) beneficial ownership of, or the ability to control, directly or through the medium of other companies or by any other indirect means, more than 5% of the ordinary share capital of the company,
(ii) possession of, or entitlement to acquire, rights entitling the holder to receive more than 5% of any distributions that may be made by the company, or
(iii) where the company is a close company, possession of, or entitlement to acquire, rights that would in the event of the winding up of the company, or in any other circumstances, entitle the holder to receive more than 5% of the assets that would then be available for distribution among the participators, but
(b) the worker is to be regarded as not having a material interest in a company if that interest is a result, to any extent, of any arrangements the main purpose, or one of the main purposes, of which is to secure that subsection (2) does not apply.
(6) And for the purposes of subsection (5)(a) “participator” has the meaning given by section 454 of CTA 2010.
(7) In this Chapter—
“arrangements” include any agreement, understanding, scheme transaction or series of transactions (whether or not legally enforceable);
“the client”, “the umbrella company” and “the worker” are to be construed in accordance with subsection (1);
“employed”, in relation to an individual, does not include the individual being treated as employed as a result of any of—
Chapters 7 to 10 of this Part (deemed employment by intermediaries), or
section 863A of ITTOIA 2005 (deemed employment of partners in limited liability partnerships),
and “employer” is to be construed accordingly;
“PAYE provisions” means the provisions of Part 11 or PAYE regulations;
“the umbrella company arrangements conditions” means the conditions set out in subsection (4).
(1) If the contract referred to in subsection (4)(a) of section 61Y is between the umbrella company and a person other than the client, the person referred to in subsection (4)(c)(i) of that section is a relevant party.
(2) The client is a relevant party if—
(a) the contract referred to in subsection (4)(a) of that section is between the umbrella company and the client, or
(b) the person referred to in subsection (4)(c)(i) of that section—
(i) is connected with the umbrella company, or
(ii) is non-UK resident.
(3) In a case where—
(a) both the client and the person referred to in subsection (4)(c)(i) of section 61Y are non-UK resident,
(b) the provision of the services or payment or other consideration for the services is a consequence of a series of contracts involving other persons (other than the worker), and
(c) at least one of those persons is UK resident,
the person who is UK resident and is closest, by reference to that series of contracts, to the client is a relevant party.
(1) Subsection (5) applies if any of the following cases applies.
(2) Case 1 is that—
(a) a person (“the purported umbrella company”) participates in arrangements that would, if an individual were employed by the purported umbrella company, result in the umbrella company arrangements conditions being met in relation to services the individual provides to the client,
(b) either—
(i) it is reasonable to suppose that one or more participants in the arrangements, other than the purported umbrella company or the individual, would assume that the purported umbrella company is the employer of that individual, or
(ii) the purported umbrella company has taken any step that it is reasonable to suppose was intended to give the impression to any person (whether or not that impression is given) that the purported umbrella company is the employer of the individual,
(c) the individual is not employed by the purported umbrella company, and
(d) if the individual were employed by the purported umbrella company subsection (2) of section 61Y would apply.
(3) Case 2 is that—
(a) a person (“the purported umbrella company”) participates in arrangements that would, if an individual were employed by the purported umbrella company, result in the umbrella company arrangements conditions being met in relation to services the individual provides to the client,
(b) the individual would, ignoring this section, be treated as employed by the purported umbrella company as a result of Chapter 7 of this Part,
(c) if the individual were employed by the purported umbrella company subsection (2) of section 61Y would apply,
(d) if it did apply accordingly, the contract referred to in subsection (4)(a) of that section would be between the umbrella company and the client, and
(e) the provision of the services by the individual to the client was not as a result of services having been provided to the individual in connection with finding the client with a view to the individual personally providing services to the client—
(i) by the purported umbrella company, or
(ii) where the provision of services to the client is as a result of a series of contracts, by one or more of the parties to those contracts.
(4) Case 3 is that—
(a) a company (“the purported umbrella company”) in which an individual has a material interest, within the meaning given by subsection (5)(a) of section 61Y, participates in arrangements that would, if the company were the umbrella company, result in the umbrella company arrangements conditions being met in relation to services the individual provides to the client,
(b) either—
(i) it is reasonable to suppose that one or more participants in the arrangements, other than the purported umbrella company or the individual, would assume that a substantial proportion of amounts provided to the purported umbrella company in respect of the services will be paid to the individual as earnings, or
(ii) the purported umbrella company has taken any step that it is reasonable to suppose was intended to give the impression to any person (whether or not that impression is given) that a substantial proportion of amounts provided to the purported umbrella company in respect of the services will be paid to the individual as earnings,
(c) it is not the case that a substantial proportion of amounts provided to the purported umbrella company in respect of the services is paid to the individual as earnings, and
(d) subsection (2) of section 61Y would apply if subsection (1)(b)(ii) of that section (requirement that the umbrella company is not a company in which the worker has a material interest) were omitted.
(5) If this subsection applies—
(a) the individual is to be treated for income tax purposes as holding an employment with the purported umbrella company, the duties of which consist of the services the individual provides to the client,
(b) all relevant remuneration is to be treated for income tax purposes as earnings from that employment,
(c) where there is any provision of relevant remuneration (by any person and to any person) that does not result (whether as a direct result of that provision, as a result of the onward provision of that remuneration or otherwise) in the payment of PAYE income of that remuneration, or any part of it, to the individual, the purported umbrella company is treated as making, and the individual is treated as receiving—
(i) a payment of PAYE income in the relevant amount made at the time it was provided for the purposes of the PAYE provisions, and
(ii) a qualifying umbrella company payment made in the relevant amount at that time for the purposes of section 61Y(3),
(d) Chapters 7 to 10 of this Part (deemed employment by intermediaries) do not apply in relation to the provision of those services,
(e) section 863A (deemed employment of partners in limited liability partnerships) of ITTOIA 2005 does not apply so far as it otherwise would apply in relation to the provision of those services, and
(f) accordingly, section 61Y(2) will apply in relation to the purported umbrella company.
(6) For the purposes of subsection (5)—
(a) in paragraph (c) the relevant amount means so much of the remuneration provided as does not result in the payment of PAYE income to the individual, and
(b) that paragraph only applies in relation to the initial provision of an amount of relevant remuneration (and not to any subsequent onward provision of that same amount).
(7) If subsection (5) would, ignoring this subsection, apply in relation to more than one purported umbrella company in relation to services the individual provides to the client, that subsection only applies in relation to the purported umbrella company that—
(a) is a person to whom PAYE regulations apply and is closest to the individual, by reference to the contract or series of contracts resulting in the provision of those services, or
(b) if none of the purported umbrella companies is a person to whom PAYE regulations apply, is closest to the individual by reference to that contract or those contracts.
(8) Where subsection (5) applies and there is a person who is an umbrella company in relation to the services the individual provides to the client, that subsection has effect as if—
(a) paragraph (a) were omitted,
(b) in paragraph (b), the reference to that employment were to the employment of the individual by the umbrella company,
(c) in paragraph (c), the reference to the purported umbrella company were to the umbrella company, and
(d) paragraph (f) were omitted.
(9) Subsection (10) applies where subsection (5) applies and there is more than one person who—
(a) is an umbrella company in relation to services the individual provides to the client, or
(b) is a purported umbrella company in relation to those services (including a purported umbrella company in relation to which subsection (5) does not apply as a result of subsection (7)).
(10) Where this subsection applies, each of the persons falling within paragraphs (a) or (b) of subsection (9) is (to the extent this would not otherwise be the case) jointly and severally liable to pay any amount payable, in accordance with the PAYE provisions, in relation to the relevant remuneration.
(11) For the purposes of this section “relevant remuneration” means—
(a) all remuneration receivable by the individual (from any person) in consequence of providing the services, and
(b) any other amount that it is just and reasonable to attribute to provision of the services by the individual (for example, any amounts that would form part of any deemed direct employment payment or deemed direct payment if any of Chapters 8, 9 or 10 of this Part applied).
(1) Subsection (2) applies where an officer of Revenue and Customs considers that a person is, or may be, jointly and severally liable to pay an amount as a result of this Chapter.
(2) The officer may at any time disclose to the person such information as the officer considers appropriate (whether or not such a disclosure would otherwise be permitted under section 18(2)(a) of CRCA 2005 or any other enactment) for the purposes of informing the person about that liability (“the joint liability”) including—
(a) the identity of any person who is an umbrella company, a purported umbrella company or the worker in relation to the arrangements to which the joint liability relates, and
(b) information about the nature and extent of the liability of an umbrella company or a purported umbrella company that (by virtue of this Chapter) results, or may result, in the joint liability.
(3) Information disclosed in reliance on subsection (2) may not be further disclosed without the consent of the Commissioners for His Majesty’s Revenue and Customs (which may be general or specific).
(4) Where a person contravenes subsection (3) by disclosing information relating to a person whose identity—
(a) is specified in the disclosure, or
(b) can be deduced from it,
section 19 of CRCA 2005 (offence of wrongful disclosure) applies in relation to the disclosure as it applies in relation to a disclosure in contravention of section 20(9) of that Act.
(5) In this section “CRCA 2005” means the Commissioners for Revenue and Customs Act 2005.
(1) This section explains what is meant by “earnings” in the employment income Parts.
(2) In those Parts “earnings”, in relation to an employment, means—
(a) any salary, wages or fee,
(b) any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth, or
(c) anything else that constitutes an emolument of the employment.
(3) For the purposes of subsection (2) “money’s worth” means something that is—
(a) of direct monetary value to the employee, or
(b) capable of being converted into money or something of direct monetary value to the employee.
(4) Subsection (1) does not affect the operation of statutory provisions that provide for amounts to be treated as earnings (and see section 721(7)).
64 Relationship between earnings and benefits code
(1) This section applies if, apart from this section, the same benefit would give rise to two amounts (“A” and “B”)—
(a) A being an amount of earnings as defined in Chapter 1 of this Part, and
(b) B being an amount to be treated as earnings under the benefits code.
(2) In such a case—
(a) A constitutes earnings as defined in Chapter 1 of this Part, and
(b) the amount (if any) by which B exceeds A is to be treated as earnings under the benefits code.
(3) This section does not apply in connection with living accommodation to which Chapter 5 of this Part applies.
(4) In that case section 109 applies to determine the relationship between that Chapter and Chapter 1 of this Part.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66 Meaning of “employment” and related expressions
(1) In the benefits code—
(a) “employment” means a taxable employment under Part 2, and
(b) “employed”, “employee” and “employer” have corresponding meanings.
(2) Where a Chapter of the benefits code applies in relation to an employee—
(a) references in that Chapter to “the employment” are to the employment of that employee, and
(b) references in that Chapter to “the employer” are to the employer in respect of that employment.
(3) For the purposes of the benefits code an employment is a “taxable employment under Part 2” in a tax year if the earnings from the employment for that year are (or would be if there were any) general earnings to which the charging provisions of Chapter 4 or 5 of Part 2 apply.
(4) In subsection (3)—
(a) the reference to an employment includes employment as a director of a company, and
(b) “earnings” means earnings as defined in Chapter 1 of this Part.
(5) In the benefits code “lower-paid employment as a minister of religion” has the same meaning as in Part 4 (see section 290D).
67 Meaning of “director” and “full-time working director”
(1) In the benefits code “director” means—
(a) in relation to a company whose affairs are managed by a board of directors or similar body, a member of that body,
(b) in relation to a company whose affairs are managed by a single director or similar person, that director or person, and
(c) in relation to a company whose affairs are managed by the members themselves, a member of the company,
and includes any person in accordance with whose directions or instructions the directors of the company (as defined above) are accustomed to act.
(2) For the purposes of subsection (1) a person is not to be regarded as a person in accordance with whose directions or instructions the directors of the company are accustomed to act merely because the directors act on advice given by that person in a professional capacity.
(3) In the benefits code “full-time working director” means a director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity.
(1) For the purposes of the benefits code a person has a material interest in a company if condition A or B is met.
(2) Condition A is that the person (with or without one or more associates) or any associate of that person (with or without one or more other such associates) is—
(a) the beneficial owner of, or
(b) able to control, directly or through the medium of other companies or by any other indirect means,
more than 5% of the ordinary share capital of the company.
(3) Condition B is that, in the case of a close company, the person (with or without one or more associates) or any associate of that person (with or without one or more other such associates), possesses or is entitled to acquire, such rights as would—
(a) in the event of the winding-up of the company, or
(b) in any other circumstances,
give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.
(4) In this section—
“associate” has the meaning given by section 448 of CTA 2010 except that, for this purpose, “relative” in section 448(1) has the meaning given by subsection (5) below, and
“participator” has the meaning given by section 454 of CTA 2010.
(5) For the purposes of this section a person (“A”) is a relative of another (“B”) if A is—
(a) B’s spouse or civil partner,
(b) a parent, child or remoter relation in the direct line either of B or of B’s spouse or civil partner,
(c) a brother or sister of B or of B’s spouse or civil partner, or
(d) the spouse or civil partner of a person falling within paragraph (b) or (c).
(1) The definition of “control” in section 995 of ITA 2007 (which is applied for the purposes of this Act by section 719) is extended as follows.
(2) For the purposes of the benefits code that definition applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate.
(1) Subsections (2) to (7) have effect for the purposes of the benefits code.
(2) A benefit provided for an employee is provided under “optional remuneration arrangements” so far as it is provided under arrangements of type A or B (regardless of whether those arrangements are made before or after the beginning of the person's employment).
(3) “Type A arrangements” are arrangements under which, in return for the benefit, the employee gives up the right (or a future right) to receive an amount of earnings within Chapter 1 of Part 3.
(4) “Type B arrangements” are arrangements (other than type A arrangements) under which the employee agrees to be provided with the benefit rather than an amount of earnings within Chapter 1 of Part 3.
(5) A benefit provided for an employee is to be regarded as provided under optional remuneration arrangements (whether of type A or type B) so far as it is just and reasonable to attribute the provision of the benefit to the arrangements in question.
(6) Where a benefit is provided for an employee under any arrangements, the mere fact that under the arrangements the employee makes good, or is required to make good, any part of the cost of provision is not to be taken to show that the benefit is (to any extent) provided otherwise than under optional remuneration arrangements.
(7) Where a benefit is provided for an employee partly under optional remuneration arrangements and partly otherwise than under such arrangements, the benefits code is to apply with any modifications (including provision for just and reasonable apportionments) that may be required for ensuring that the benefit is treated—
(a) in accordance with the relevant provision in the column 2 of the table so far as it is provided under optional remuneration arrangements, and
(b) in accordance with the relevant provision in column 1 of the table so far as it is provided otherwise than under such arrangements.
Column 1 | Column 2
Section | Section
81(1) | 81(1A)(b)
87(1) | 87A(1)(a)
94(1) | 94A(1)(a)
102(1A) | 102(1B)(b)
120(1) | 120A(1)(a)
149(1) | 149A(2)(a)
154(1) | 154A(1)(a)
160(1) | 160A(2)(a)
175(1) | 175(1A)(b)
203(1) | 203A(1)(a)
(1) For the purposes of the benefits code “the amount foregone”—
(a) in relation to a benefit provided for an employee under type A arrangements means the amount of earnings mentioned in section 69A(3);
(b) in relation to a benefit provided for an employee under type B arrangements means the amount of earnings mentioned in section 69A(4);
(c) in relation to a benefit provided for an employee partly under type A arrangements and partly under type B arrangements, means the sum of the amounts foregone under the arrangements of each type.
(2) Subsection (3) applies where, in order to determine the amount foregone with respect to a particular benefit mentioned in section 69A(3) or (4), it is necessary to apportion an amount of earnings to the benefit.
(3) The apportionment is to be made on a just and reasonable basis.
(4) In this section and section 69A references to a benefit provided for an employee include a benefit provided for a member of an employee's family or household.
(5) In this section and section 69A—
“benefit” includes any benefit or facility, regardless of its form and the manner of providing it;
“earnings” means earnings within Chapter 1 of Part 3 (and includes a reference to amounts which would have been such earnings if the employee had received them).
(1) This Chapter applies to a sum paid to an employee in a tax year if the sum—
(a) is paid to the employee in respect of expenses, and
(b) is so paid by reason of the employment.
(2) This Chapter applies to a sum paid away by an employee in a tax year if the sum—
(a) was put at the employee’s disposal in respect of expenses,
(b) was so put by reason of the employment, and
(c) is paid away by the employee in respect of expenses.
(3) For the purposes of this Chapter it does not matter whether the employment is held at the time when the sum is paid or paid away so long as it is held at some point in the tax year in which the sum is paid or paid away.
(4) References in this Chapter to an employee accordingly include a prospective or former employee.
(5) This Chapter does not apply to the extent that the sum constitutes earnings from the employment by virtue of any other provision.
71 Meaning of paid or put at disposal by reason of the employment
(1) If an employer pays a sum in respect of expenses to an employee it is to be treated as paid by reason of the employment unless—
(a) the employer is an individual, and
(b) the payment is made in the normal course of the employer’s domestic, family or personal relationships.
(2) If an employer puts a sum at an employee’s disposal in respect of expenses it is to be treated as put at the employee’s disposal by reason of the employment unless—
(a) the employer is an individual, and
(b) the sum is put at the employee’s disposal in the normal course of the employer’s domestic, family or personal relationships.
72 Sums in respect of expenses treated as earnings
(1) If this Chapter applies to a sum, the sum is to be treated as earnings from the employment for the tax year in which it is paid or paid away.
(2) Subsection (1) does not prevent the making of a deduction allowed under any of the provisions listed in subsection (3).
(3) The provisions are—
section 336 (deductions for expenses: the general rule);
section 337 (travel in performance of duties);
section 338 (travel for necessary attendance);
section 340 (travel between group employments);
section 340A (travel between linked employments);
section 341 (travel at start or finish of overseas employment);
section 342 (travel between employments where duties performed abroad);
section 343 (deduction for professional membership fees);
section 344 (deduction for annual subscriptions);
section 346 (deduction for employee liabilities);
section 351 (expenses of ministers of religion);
section 353 (deductions from earnings charged on remittance).
(1) This Chapter applies to a cash voucher provided for an employee by reason of the employment which is received by the employee.
(2) A cash voucher provided for an employee by the 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.
(3) A cash voucher provided for an employee and appropriated to the employee—
(a) by attaching it to a card held for the employee, or
(b) in any other way,
is to be treated for the purposes of this Chapter as having been received by the employee at the time when it is appropriated.
74 Provision for, or receipt by, member of employee’s family
For the purposes of this Chapter any reference to a cash voucher being provided for or received by an employee includes a reference to it being provided for or received by a member of the employee’s family.
(1) In this Chapter “cash voucher” means a voucher, stamp or similar document capable of being exchanged for a sum of money which is—
(a) greater than,
(b) equal to, or
(c) not substantially less than,
the expense incurred by the person at whose cost the voucher, stamp or similar document is provided.
(2) For the purposes of subsection (1) it does not matter whether the document—
(a) is also capable of being exchanged for goods or services;
(b) is capable of being exchanged singly or together with other vouchers, stamps, or documents;
(c) is capable of being exchanged immediately or only after a time.
(3) Subsection (1) is subject to section 76 (sickness benefits-related voucher).
(1) This section applies where—
(a) the expense incurred by the person at whose cost a voucher, stamp or similar document is provided (“the provision expense”) includes costs to that person of providing sickness benefits (“sickness benefits costs”),
(b) the voucher, stamp or document would be a cash voucher (apart from this section) but for the fact that the sum of money for which it is capable of being exchanged (“the exchange sum”) is substantially less than the provision expense, and
(c) the whole or part of the difference between the exchange sum and the provision expense represents the sickness benefits costs.
(2) The voucher, stamp or document is a cash voucher within the meaning of this Chapter if—
E
=
PE
-
D
or
E
is
not
substantially
less
than
PE
-
D
where—
E is the exchange sum,
PE is the provision expense, and
D is the amount of the difference between E and PE which represents the sickness benefits costs.
(3) In this section “sickness benefits” mean benefits in connection with sickness, personal injury or death.
If a person incurs expense in or in connection with the provision of vouchers, stamps or similar documents for two or more employees as members of a group or class, the expense incurred in respect of one of them is to be such part of that expense as is just and reasonable.
This Chapter does not apply to a cash voucher if—
(a) it is of a kind made available to the public generally, and
(b) it is provided to the employee or a member of the employee’s family on no more favourable terms than to the public generally.
(1) This Chapter does not apply to a cash voucher received by an employee if—
(a) it is issued under a scheme, and
(b) at the time when it is received the scheme is a scheme approved by an officer of Revenue and Customs for the purposes of this section.
(2) An officer of Revenue and Customs must not approve a scheme for the purposes of this section unless the officer is satisfied that it is practicable for income tax in respect of all payments made in exchange for vouchers issued under the scheme to be deducted in accordance with PAYE regulations.
This Chapter does not apply to a cash voucher if it is—
(a) a document intended to enable a person to obtain payment of a sum which would not have constituted employment income if paid to the person directly, or
(b) a savings certificate where the accumulated interest payable in respect of it is exempt from tax (or would be so exempt if certain conditions were met).
(1) The cash equivalent of the benefit of a cash voucher to which this Chapter applies is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.
(1A) Where a cash voucher to which this Chapter applies is provided pursuant to optional remuneration arrangements—
(a) subsection (1) does not apply, and
(b) the relevant amount is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.
(1B) In this section “the relevant amount” means—
(a) the cash equivalent, or
(b) if greater, the amount foregone with respect to the benefit of the voucher (see section 69B).
(2) The cash equivalent is the sum of money for which the voucher is capable of being exchanged.
(3) For the purposes of subsection (1B), assume that the cash equivalent is zero if the condition in subsection (4) is met.
(4) The condition is that the benefit of the voucher would be exempt from income tax but for section 228A (exclusion of certain exemptions).
82 Non-cash vouchers to which this Chapter applies
(1) This Chapter applies to a non-cash voucher provided for an employee by reason of the employment which is received by the employee.
(2) A non-cash voucher provided for an employee by the 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.
(3) A non-cash voucher provided for an employee and appropriated to the employee—
(a) by attaching it to a card held for the employee, or
(b) in any other way,
is to be treated for the purposes of this Chapter as having been received by the employee at the time when it is appropriated.
83 Provision for, or receipt by, member of employee’s family
For the purposes of this Chapter any reference to a non-cash voucher being provided for or received by an employee includes a reference to it being provided for or received by a member of the employee’s family.
(1) In this Chapter “non-cash voucher” means—
(a) a voucher, stamp or similar document or token which is capable of being exchanged for money, goods or services,
(ab) a childcare voucher,
(b) a transport voucher, or
(c) a cheque voucher,
but does not include a cash voucher.
(2) For the purposes of subsection (1)(a) it does not matter whether the document or token is capable of being exchanged—
(a) singly or together with other vouchers, stamps, documents or tokens;
(b) immediately or only after a time.
(2A) In this Chapter “childcare voucher” means a voucher, stamp or similar document or token intended to enable a person to obtain the provision of care for a child (whether or not in exchange for it).
(3) In this Chapter “transport voucher” means a ticket, pass or other document or token intended to enable a person to obtain passenger transport services (whether or not in exchange for it).
(4) In this Chapter “cheque voucher” means a cheque—
(a) provided for an employee, and
(b) intended for use by the employee wholly or mainly for payment for—
(i) particular goods or services, or
(ii) goods or services of one or more particular classes;
and, in relation to a cheque voucher, references to a voucher being exchanged for goods or services are to be read accordingly.
85 Non-cash voucher made available to public generally
This Chapter does not apply to a non-cash voucher if—
(a) it is of a kind made available to the public generally, and
(b) it is provided to the employee or a member of the employee’s family on no more favourable terms than to the public generally.
86 Transport vouchers under pre-26th March 1982 arrangements
(1) This Chapter does not apply to a transport voucher provided for an employee of a passenger transport undertaking under arrangements in operation on 25th March 1982 which meet the condition in subsection (2).
(2) The condition is that the arrangements are intended to enable the employee or a member of the employee’s family to obtain passenger transport services provided by—
(a) the employer,
(b) a subsidiary of the employer,
(c) a body corporate of which the employer is a subsidiary, or
(d) another passenger transport undertaking.
(3) In this section—
“passenger transport undertaking” means an undertaking whose business consists wholly or mainly in the carriage of passengers or a subsidiary of such an undertaking, and
“subsidiary” means a wholly-owned subsidiary within the meaning of section 1159 of and Schedule 6 to the Companies Act 2006.
87 Benefit of non-cash voucher treated as earnings
(1) The cash equivalent of the benefit of a non-cash voucher to which this Chapter applies is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.
(2) The cash equivalent is the difference between—
(a) the cost of provision, and
(b) any part of that cost made good by the employee , to the person incurring it, on or before 6 July following the relevant tax year.
(2A) If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is—
(a) the tax year in which the cost of provision is incurred, or
(b) if later, the tax year in which the employee receives the voucher.
(2B) If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.
(3) In this Chapter the “cost of provision” means, in relation to a non-cash voucher, the expense incurred in or in connection with the provision of—
(a) the voucher, and
(b) the money, goods or services for which it is capable of being exchanged,
by the person at whose cost they are provided.
(3A) In the case of a childcare voucher, the reference in subsection (3)(b) to the services for which the voucher is capable of being exchanged is to the provision of care for a child which may be obtained by using it.
(4) In the case of a transport voucher, the reference in subsection (3)(b) to the services for which the voucher is capable of being exchanged is to the passenger transport services which may be obtained by using it.
(5) If a person incurs expense in or in connection with the provision of non-cash vouchers for two or more employees as members of a group or class, the expense incurred in respect of one of them is to be such part of that expense as is just and reasonable.
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87A Benefit of non-cash voucher treated as earnings: optional remuneration arrangements
(1) Where a non-cash voucher to which this Chapter applies 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 voucher is received by the employee, and
(b) section 87(1) does not apply.
(2) To find the relevant amount, first determine which (if any) is the greater of—
(a) the cost of provision (see section 87(3)), and
(b) the amount foregone with respect to the benefit of the voucher (see section 69B).
(3) If the cost of provision is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent of the benefit of the non-cash voucher (see section 87(2)).
(4) Otherwise, the “relevant amount” is the difference between—
(a) the amount foregone, and
(b) any part of the cost of provision that is made good by the employee, to the person incurring it, on or before 6 July following the relevant tax year.
(5) If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is—
(a) the tax year in which the cost of provision is incurred, or
(b) if later, the tax year in which the employee receives the voucher.
(6) If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.
(7) For the purposes of subsections (2) and (3), assume that the cost of provision is zero if the condition in subsection (8) is met.
(8) The condition is that the non-cash voucher would be exempt from income tax but for section 228A (exclusion of certain exemptions).
(1) In the case of a non-cash voucher other than a cheque voucher, the amount treated as earnings under section 87 or 87A is to be treated as received—
(a) in the tax year in which the cost of provision is incurred, or
(b) if later, in the tax year in which the voucher is received by the employee.
(2) In the case of a cheque voucher, the amount treated as earnings under section 87 or 87A is to be treated as received in the tax year in which the voucher is handed over in exchange for money, goods or services.
(3) For the purposes of subsection (2) and sections 87(2B) and 87A(6), Where a cheque voucher is posted it is to be treated as handed over at the time of posting.
(1) This Chapter applies to a credit-token provided for an employee by reason of the employment which is used by the employee to obtain money, goods or services.
(2) A credit-token provided for an employee by the 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.
91 Provision for, or use by, member of employee’s family
For the purposes of this Chapter—
(a) any reference to a credit-token being provided for an employee includes a reference to it being provided for a member of the employee’s family, and
(b) use of a credit-token by a member of an employee’s family is to be treated as use of the token by the employee.
(1) In this Chapter “credit-token” means a credit card, debit card or other card, a token, a document or other object given to a person by another person (“X”) who undertakes—
(a) on the production of it, to supply money, goods or services on credit, or
(b) if a third party (“Y”) supplies money, goods or services on its production, to pay Y for what is supplied.
(2) A card, token, document or other object can be a credit-token even if—
(a) some other action is required in addition to its production in order for the money, goods or services to be supplied;
(b) X in paying Y may take a discount or commission.
(3) For the purposes of this section—
(a) the use of an object given by X to operate a machine provided by X is to be treated as its production to X, and
(b) the use of an object given by X to operate a machine provided by Y is to be treated as its production to Y.
(4) A “credit-token” does not include a cash voucher or a non-cash voucher.