Income and Corporation Taxes Act 1988

168 Other interpretative provisions. U.K.

M1 (1) The following provisions of this section apply for the interpretation of expressions used in this Chapter.

(2) Subject to section 165(6)(b), “employment” means an office or employment the emoluments of which fall to be assessed under Schedule E; and related expressions shall be construed accordingly.

(3) For the purposes of this Chapter—

(a) all sums paid to an employee by his employer in respect of expenses, and

(b) all such provision as is mentioned in this Chapter which is made for an employee, or for members of his family or household, by his employer,

are deemed to be paid to or made for him or them by reason of his employment, except any such payment or provision [F1 which is made by the employer, being an individual, in the normal course of his domestic, family or personal relationships].

(4) References to members of a person’s family or household are to his spouse, his sons and daughters and their spouses, his parents and his servants, dependents and guests.

(5) As respects cars, the following definitions apply—

(a) “car” means any mechanically propelled road vehicle except—

(i) a vehicle of a construction primarily suited for the conveyance of goods or burden of any description,

(ii) a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used,

(iii) a motor cycle as defined in section 190(4) of the M2 Road Traffic Act 1972, and

(iv) an invalid carriage as defined in section 190(5) of that Act;

(b) the age of a car at any time is the interval between the date of its first registration and that time;

[F2 (c) “business travel”, in relation to any employee, means any travelling the expenses of which, if incurred out of the emoluments of his employment, would [F3 (in the absence of sections 197AD to 197AF)] be deductible under section 198;]

[F4 (d) the date of a car’s first registration is the date on which it was first registered under [F5 the Vehicle Excise and Registration Act 1994] or under corresponding legislation of any country or territory;]

[F6 (e) the price of a car as regards a year shall be determined in accordance with the provisions contained in or made under sections 168A to 168G; and]

(f) “private use”, in relation to a car made available to any person, or to others being members of his family or household, means any use otherwise than for his business travel.

[F7 (5A) As respects vans, the following definitions apply—

(a) “van” means a mechanically propelled road vehicle which is—

(i) of a construction primarily suited for the conveyance of goods or burden of any description, and

(ii) of a design weight not exceeding 3,500 kilograms,

and which is not a motor cycle as defined in section 185(1) of the M3 Road Traffic Act 1988;

(b) the age of a van at any time is the interval between the date of its first registration and that time;

[F8 (c) “business travel”, in relation to any employee, means any travelling the expenses of which, if incurred out of the emoluments of his employment, would [F9 (in the absence of sections 197AD to 197AF)] be deductible under section 198;]

(d) the date of a van’s first registration is the date on which it was first registered under [F10 the Vehicle Excise and Registration Act 1994] or under corresponding legislation of any country or territory;

(e) “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; and

(f) “private use”, in relation to a van made available to any person, or to others being members of his family or household, means any use otherwise than for his business travel.]

(6) For the purposes of this Chapter—

(a) a car made available in any year to an employee, or to others being members of his family or household, by reason of his employment is deemed to be available in that year for his or their private use unless the terms on which the car is made available prohibit such use and no such use is made of the car in that year;

(b) a car made available to an employee, or to others being members of his family or household, by his employer is deemed to be made available to him or them by reason of his employment (unless the employer is an individual and [F11 the car is] made so available in the normal course of his domestic, family or personal relationships).

[F12 (c) a van made available in any year to an employee, or to others being members of his family or household, by reason of his employment is deemed to be available in that year for his or their private use unless the terms on which the van is made available prohibit such use and no such use is made of the van in that year;

(d) a van made available to an employee, or to others being members of his family or household, by his employer is deemed to be made available to him or them by reason of his employment (unless the employer is an individual and [F13 the van is] made so available in the normal course of his domestic, family or personal relationships).]

(7) For the purposes of section 156, the market value of an asset at any time is the price which it might reasonably have been expected to fetch on a sale in the open market at that time.

(8) Subject to subsection (9) below, “director” means—

(a) in relation to a company whose affairs are managed by a board of directors or similar body, a member of that board or similar 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.

(9) A person is not under subsection (8) above to be deemed to be a person in accordance with whose directions or instructions the directors of the company are accustomed to act by reason only that the directors act on advice given by him in a professional capacity.

(10) “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.

(11) A person shall be treated as having a material interest [F14 in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—

(a) is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 5 per cent. of the ordinary share capital of the company, or

(b) in the case of a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 5 per cent. of the assets which would then be available for distribution among the participators.]

• In this subsection “associate” has the same meaning as in section 417(3), except that for this purpose “relative” in that subsection has the meaning given by section 160(6) [F15 and “participator” has the meaning given by section 417(1)].

(12) “Control”, in relation to a body corporate or partnership, has the meaning given to it by section 840; and the definition of “control” in that section applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate.

(13) “Year” means year of assessment (except where the expression is used with reference to the age of a car).

Textual Amendments

F1 Words in s. 168(3) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), s. 134(1), Sch. 20 para. 10(1)

F2 S. 168(5)(c) substituted (with effect in accordance with s. 62(5) of the amending Act) by Finance Act 1997 (c. 16), s. 62(4)

F3 Words in s. 168(5)(c) inserted (with effect in accordance with s. 57(4) of the amending Act) by Finance Act 2001 (c. 9), Sch. 12 Pt. 2 para. 4(2)

F4 S. 168(5)(d) substituted (27.7.1993 with effect for the year 1994-95 and subsequent years of assessment) by 1993 c. 34, s. 72, Sch. 3 paras. 3(1), 7

F5 Words in s. 168(5)(d) substituted (1.9.1994) by Vehicle Excise and Registration Act 1994 (c. 22), ss. 63, 66(1), Sch. 3 para. 22 (with s. 57(4))

F6 S. 168(5)(e) substituted (with effect for the year 1994-95 and subsequent years of assessment) by 1993 c. 34, s. 72, Sch. 3 paras. 3(2), 7

F7 S. 168(5A) inserted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by 1993 c. 34, s. 73, Sch. 4 paras. 6(1), 8

F8 S. 168(5A)(c) substituted (with effect in accordance with s. 62(5) of the amending Act) by Finance Act 1997 (c. 16), s. 62(4)

F9 Words in s. 168(5A)(c) inserted (with effect in accordance with s. 57(4) of the amending Act) by Finance Act 2001 (c. 9), Sch. 12 Pt. 2 para. 4(3)

F10 Words in s. 168(5A)(d) substituted (1.9.1994) by Vehicle Excise and Registration Act 1994 (c. 22), ss. 63, 66(1), Sch. 3 para. 22 (with s. 57(4))

F11 Words in s. 168(6)(b) substituted with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), s. 134(1), Sch. 20 para. 10(2)(a)

F12 S. 168(6)(c)(d) added (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by 1993 c. 34, s. 73, Sch. 4 paras. 6(2), 8

F13 Words in s. 168(6)(d) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), s. 134(1), Sch. 20 para. 10(2)(b)

F14 1989 s.107and Sch.12 para 8in relation to accounting periods beginning after 31March 1989.Previously

“in a company—(a) if he, either on his own or with any one or more of his associates, or if any associate of his with or without such other associates, is the beneficial owner of, or able, directly or through the medium of other companies or by any other indirect means, to control, more than 5 per cent. of the ordinary share capital of the company; or (b) if, in the case of a close company, on an amount equal to the whole distributable income of the company falling to be apportioned under Part XI for the purpose of computing total income, more than 5 per cent. of that amount could be apportioned to him together with his associates (if any), or to any associate of his, or any such associates taken together.”.

F15 1989 s.107and Sch.12 para 8for accounting periods beginning after 31March 1989.

Modifications etc. (not altering text)

C1 Definition applied for purposes of 1988(F) s.131—penalties; and 1989 s.134—non-payment of tax by non-residents.

Marginal Citations

M1 Source—1976 s.72(1)-(12); 1980 s.51(3)

M2 1972 c. 20.

M3 1988 c. 52.