- Latest available (Revised)
- Original (As enacted)
Finance Act 2016, Section 13 is up to date with all changes known to be in force on or before 26 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.
Whole provisions yet to be inserted into this Act (including any effects on those provisions):
(1)ITEPA 2003 is amended as follows.
(2)After section 323 insert—
(1)No liability to income tax arises in respect of a benefit provided by, or on behalf of, an employer to an employee or a member of the employee's family or household if—
(a)conditions A to D are met, or
(b)in a case where subsection (2) applies, conditions A to E are met.
(2)This subsection applies where—
(a)the employer is a close company, and
(b)the employee is—
(i)a person who is a director or other office-holder of the employer, or
(ii)a member of the family or household of such a person.
(3)Condition A is that the benefit is not cash or a cash voucher within the meaning of section 75.
(4)Condition B is that the benefit cost of the benefit does not exceed £50.
(5)In this section “benefit cost”, in relation to a benefit, means—
(a)the cost of providing the benefit, or
(b)if the benefit is provided to more than one person and the nature of the benefit or the scale of its provision means it is impracticable to calculate the cost of providing it to each person to whom it is provided, the average cost per person of providing the benefit.
(6)For the purposes of subsection (5)(b), the average cost per person of providing a benefit is found by dividing the total cost of providing the benefit by the number of persons to whom the benefit is provided.
(7)Condition C is that the benefit is not provided pursuant to relevant salary sacrifice arrangements or any other contractual obligation.
(8)“Relevant salary sacrifice arrangements”, in relation to the provision of a benefit to an employee or to a member of an employee's family or household, means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the benefit.
(9)Condition D is that the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services.
(10)Condition E is that—
(a)the benefit cost of the benefit provided to the employee, or
(b)in a case where the benefit is provided to a member of the employee's family or household who is not an employee of the employer, the amount of the benefit cost allocated to the employee in accordance with section 323B(4),
does not exceed the employee's available exempt amount (see section 323B).
(1)The “available exempt amount”, in relation to an employee of an employer, is the amount found by deducting from the annual exempt amount the aggregate of—
(a)the benefit cost of eligible benefits provided earlier in the tax year by, or on behalf of, the employer to the employee, and
(b)any amounts allocated to the employee in accordance with subsection (4) in respect of eligible benefits provided earlier in the tax year by, or on behalf of, the employer to a member of the employee's family or household who was not at that time an employee of the employer.
(2)The annual exempt amount is £300.
(3)For the purposes of subsection (1) “eligible benefits” means benefits in respect of which conditions A to D in section 323A are met.
(4)The amount allocated to an employee of an employer in respect of a benefit provided to a person (“P”) who—
(a)is a member of the employee's family or household, and
(b)is not an employee of the employer,
is the benefit cost of that benefit divided by the number of persons who meet the condition in subsection (5) and are members of P's family or household.
(5)This condition is met if the person is—
(a)a director or other office-holder of the employer,
(b)an employee of the employer who is a member of the family or household of a person within paragraph (a), or
(c)a former employee of the employer who—
(i)was a director or other office-holder at any time when the employer was a close company, or
(ii)is a member of the family or household of such a person.
(6)In this section “benefit cost” has the same meaning as in section 323A.
(1)The Treasury may by regulations amend section 323A so as to alter the conditions which must be met for the exemption conferred by section 323A(1) to apply.
(2)Regulations under subsection (1) may include any amendment of section 323B that is appropriate in consequence of an amendment made under subsection (1).
(3)The Treasury must not make regulations under subsection (1) unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.”
(3)In section 716 (alteration of amounts by Treasury order) in subsection (2), after paragraph (f) insert—
“(fa)section 323A(4) (trivial benefits provided by employers: cost of providing benefit),
(fb)section 323B(2) (trivial benefits provided by employers: annual exempt amount),”.
(4)In section 717(4) (negative procedure not to apply to certain statutory instruments) after “other care: meaning of “eligible employee”),” insert “ section 323C(1) (trivial benefits provided by employers), ”.
(5)The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: