Income and Corporation Taxes Act 1988

Vouchers etc. U.K.

141 Non-cash vouchers. U.K.

(1) M1 Subject to the following provisions of this section and section 157(3), where a non-cash voucher provided for an employee by reason of his employment is received by the employee, then, for the purposes of the Income Tax Acts—

(a) he shall be treated as having received in the relevant year of assessment an emolument from his employment of an amount equal to [F1 the expense incurred (“the chargeable expense”)—

(i) by the person at whose cost the voucher and the money, goods or services for which it is capable of being exchanged are provided,

(ii) in or in connection with that provision;] and

(b) any money, goods or services obtained by the employee or any other person in exchange for the voucher shall be disregarded;

F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In subsection (1)(a) above “the relevant year of assessment” means—

(a) in relation to a cheque voucher, the year of assessment in which the voucher is handed over in exchange for money, goods or services (a voucher which is posted being treated as handed over at the time of posting); and

(b) in relation to any other non-cash voucher, the year of assessment in which the chargeable expense is incurred or, if later, the year of assessment in which the voucher is received by the employee.

(3) M2 There shall be deductible under section 198, 201, [F3 201AA] or 332(3) from the amount taxable under subsection (1) above such amounts, if any, as would have been so deductible if the cost of the goods or services in question had been incurred by the employee out of his emoluments.

(4) M3 The chargeable expense shall be treated as reduced by any part of that expense made good to the person incurring it by the employee.

(5) M4 Where a non-cash voucher provided for an employee by reason of his employment is appropriated to him (whether by attaching it to a card held for him or in any other way), subsections (1) and (2) above shall have effect as if the employee had received the voucher at the time when it was so appropriated.

(6) [M5 Subsection (1)] above shall not apply in relation to a transport voucher provided for an employee of a passenger transport undertaking under arrangements in operation on 25th March 1982 and intended to enable that employee or a relation of his to obtain passenger transport services provided by—

(a) his employer;

(b) a subsidiary of his employer;

(c) a body corporate of which his employer is a subsidiary; or

(d) another passenger transport undertaking.

[F4 (6A) Subsection (1) above shall not apply in relation to a non-cash voucher to the extent that it is used by the employee to obtain the use of a car parking space at or near his place of work.]

[F5 (6B) Subsection (1) above shall not apply in relation to any non-cash voucher to the extent that it is used to obtain entertainment (includinxg hospitality of any kind) for the employee or a relation of his, if—

(a) [F6 the person at whose cost the voucher and the entertainment are provided] is neither his employer nor a person connected with his employer;

(b) neither his employer nor a person connected with his employer has directly or indirectly procured the provision of the entertainment; and

(c) the entertainment is not provided either in recognition of particular services which have been performed by him in the course of his employment or in anticipation of particular services which are to be so performed by him;

and section 839 shall apply for determining whether persons are connected for the purposes of this subsection.]

[F7 (6C) Subsection (1) above shall not apply in relation to a non-cash voucher to the extent that it is used by the employee to obtain goods, services or money where—

(a) obtaining the goods or services is incidental to his being away from his usual place of abode during a qualifying absence from home or, as the case may be, the money is obtained for the purpose of being used to obtain goods or services which would be so incidental;

(b) the authorised maximum is not exceeded in relation to that qualifying absence; and

(c) the cost of obtaining the goods or services would not be deductible as mentioned in subsection (3) above if incurred by the employee out of his emoluments.

(6D) Subsections (3) to (5) of section 200A shall apply as they apply for the purposes of that section for construing the references in subsection (6C) above to a qualifying absence from home and for determining, for the purposes of that subsection, whether the authorised maximum is exceeded.]

(7) M6 In this section—

• “cheque voucher” means a cheque provided for an employee and intended for use by him wholly or mainly for payment for particular goods or services or for 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 shall be construed accordingly;

• “passenger transport undertaking” means an undertaking whose business consists wholly or mainly in the carriage of passengers and includes a subsidiary of such an undertaking;

• “subsidiary” means a wholly owned subsidiary within the meaning of section [F8 736] of the M7 Companies Act 1985;

• “transport voucher” means any ticket, pass or other document or token intended to enable a person to obtain passenger transport services (whether or not in exchange for it) and, in relation to a transport voucher, references to a voucher being exchanged for services shall be construed as references to it being exchanged for, or otherwise being used to procure, services; and

• “non-cash voucher” does not include a cash voucher within the meaning of section 143 but, subject to that, means any voucher, stamp or similar document or token capable of being exchanged (whether singly or together with other such vouchers, stamps, documents or tokens and whether immediately or only after a time) for money, goods or services (or for any combination of two or more of those things) and includes a transport voucher and a cheque voucher.

Textual Amendments

F1 Words in s. 141(1)(a) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(2)(a)

F2 Words in s. 141(1) repealed (3.5.1994) by Finance Act 1994 (c. 9), s. 89(2)(b), Sch. 26 Pt. 5(6)

F3 Word in s. 141(3) inserted (with effect in accordance with s. 91(3) of the amending Act) by Finance Act 1995 (c. 4), s. 91(2)

F4 1988(F) s.46(1)for 1988-89and subsequent years. Previously

“subsections (1) and 2”

in subs. (6).

F5 1988(F) s.47(1)for 1988-89and subsequent years. For 1987-88see 1988(F) s.47.

F6 Words in s. 141(6B)(a) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(3)

F7 S. 141(6C)(6D) inserted (with effect in accordance with s. 93(5) of the amending Act) by Finance Act 1995 (c. 4), s. 93(1)

F8 Companies Act 1989 (c.40) s.144(4)and Sch.18 para.46on and after 1November 1990by virtue of S.I. 1990 No.1392 (c.41) (art.2(d)) (not reproduced).Previously

“736(5)(b)”.

Modifications etc. (not altering text)

C1 See S.I. 1973 No.334, regn.31(d) (in Part III Vol.5)—returns by employers.

C2 S. 141(6) modified (with effect in accordance with Sch. 24 para. 27(14) of the modifying Act) by Finance Act 1994 (c. 9), Sch. 24 para. 27(3)(4)

C3 See 1990 s.56and Sch.10 para.23—convertible securities.

C4 S. 141(6A) extended (with effect in accordance with s. 49(4) of the extending Act) by Finance Act 1999 (c. 16), s. 49(1)(2)

Marginal Citations

M1 Source—1975 (No.2) s.36(1); 1982 s.44(2)

M2 Source—1975 (No.2) s.36(2); 1982 s.44(3)

M3 Source—1975 (No.2) s.36(2A); 1981 s.70(2)

M4 Source—1975(2) s.36(3)

M5 Source—1975 (No.2) s.36(3A); 1982 s.44(4)

M6 Source—1975 (No.2) s.36(4); 1982 s.44(5)

M7 1985 c. 6.

142 Credit-tokens. U.K.

(1) M8 Subject to the provisions of this section and section 157(3), where a credit-token is provided for an employee by reason of his employment, then, for the purposes of the Income Tax Acts—

(a) on each occasion on which the employee uses the credit-token to obtain money, goods or services he shall be treated as having received an emolument from his employment of an amount equal to [F9 the expense incurred—

(i) by the person at whose cost the money, goods or services are provided,

(ii) in or in connection with that provision;] and

(b) any money, goods or services obtained by the employee by use of the credit-token shall be disregarded.

(2) M9 There shall be deductible under section 198, 201, [F10 201AA] or 332(3) from the amount taxable under subsection (1) above such amounts, if any, as would have been so deductible if the cost of the goods or services in question had been incurred by the employee out of his emoluments.

(3) M10 The expense incurred by the person [F11 mentioned in subsection (1)(a)(i) above] shall be treated as reduced by any part of that expense made good to that person by the employee.

[F12 (3A) Subsection (1) above shall not apply in relation to a credit-token to the extent that it is used by the employee to obtain the use of a car parking space at or near his place of work.]

[F13 (3B) Subsection (1) above shall not apply in relation to any credit-token to the extent that it is used to obtain entertainment (including hospitality of any kind) for the employee or a relation of his, if—

(a) the person [F14 mentioned in subsection (1)(a)(i) above] is neither his employer nor a person connected with his employer;

(b) neither his employer nor a person connected with his employer has directly or indirectly procured the provision of the entertainment; and

(c) the entertainment is not provided either in recognition of particular services which have been performed by him in the course of his employment or in anticipation of particular services which are to be so performed by him;

and section 839 shall apply for determining whether persons are connected for the purposes of this subsection.]

[F15 (3C) Subsection (1) above shall not apply in relation to a credit-token to the extent that it is used by the employee to obtain goods, services or money where—

(a) obtaining the goods or services is incidental to his being away from his usual place of abode during a qualifying absence from home or, as the case may be, the money is obtained for the purpose of being used to obtain goods or services which would be so incidental;

(b) the authorised maximum is not exceeded in relation to that qualifying absence; and

(c) the cost of obtaining the goods or services would not be deductible as mentioned in subsection (2) above if incurred by the employee out of his emoluments.

(3D) Subsections (3) to (5) of section 200A shall apply as they apply for the purposes of that section for construing the references in subsection (3C) above to a qualifying absence from home and for determining, for the purposes of that subsection, whether the authorised maximum is exceeded.]

(4) M11 In this section “credit-token” means a card, token, document or other thing given to a person by another person who undertakes—

(a) that on the production of it (whether or not some other action is also required) he will supply money, goods and services (or any of them) on credit; or

(b) that where, on the production of it to a third party (whether or not some other action is also required) the third party supplies money, goods and services (or any of them), he will pay the third party for them (whether or not taking any discount or commission);

but does not include a non-cash voucher or a cash voucher.

(5) M12 For the purposes of subsection (4) above, the use of an object to operate a machine provided by the person giving the object, or by a third party, shall be treated as production of the object to that person or, as the case may be, third party.

Textual Amendments

F9 Words in s. 142(1)(a) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(5)

F10 Words in s. 142(2) inserted (with effect in accordance with s. 91(3) of the amending Act) by Finance Act 1995 (c. 4), s. 91(2)

F11 Words in s. 142(3) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(6)

F12 1988(F) s.46(2)for 1988-89and subsequent years.

F13 1988(F) s.48(1)for 1988-89and subsequent years. For 1987-88see 1988(F) s.48.

F14 Words in s. 142(3B)(a) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(7)

F15 S. 142(3C)(3D) inserted (with effect in accordance with s. 93(5) of the amending Act) by Finance Act 1995 (c. 4), s. 93(2)

Modifications etc. (not altering text)

C5 See S.I. 1973 No.334, regn.31 (da) (in Part III Vol.5)—returns by employers.

C6 S. 142(3A) extended (with effect in accordance with s. 49(4) of the extending Act) by Finance Act 1999 (c. 16), s. 49(1)(2)

Marginal Citations

M8 Source—1975 (No.2) s.36A(1)(b), (c); 1981 s.71(1); 1982 s.45(2)

M9 Source—1975 (No.2) s.36A(2); 1981 s.71(1)

M10 Source—1975 (No.2) s.36A(3); 1981 s.71(1); 1982 s.45(2)

M11 Source—1975 (No.2) s.36A(4), (4B); 1981 s.71(1); 1982 s.45(3)

M12 Source—1975 (No.2) s.36A(4A); 1981 s.71(1); 1982 s.45(3)

143 Cash vouchers taxable under P.A.Y.E. U.K.

(1) M13 Where a cash voucher provided for an employee by reason of his employment is received by the employee, then, subject to subsection (5) below, for the purposes of the Income Tax Acts [F16 —

(a) he shall be treated as having received], at the time when he receives the voucher, an emolument of his employment equal to the sum of money for which the voucher is capable of being exchanged as mentioned in subsection (3) below; and

(b) any money obtained by the employee or any other person in exchange for the voucher shall be disregarded.

(2) Where a cash voucher provided for an employee by reason of his employment is appropriated to him (whether by attaching it to a card held for him or in any other way), subsections (1) and (5) of this section shall have effect as if the employee had received the voucher at the time when it was so appropriated.

(3) In this section “cash voucher” (subject to subsection (4) below) means any voucher, stamp or similar document capable of being exchanged (whether singly or together with such other vouchers, stamps or documents, and whether immediately or only after a time) for a sum of money greater than, equal to or not substantially less than the expense incurred [F17 by the person at whose cost the voucher is provided] (whether or not it is also capable of being exchanged for goods or services), except that it does not include—

(a) any document intended to enable a person to obtain payment of the sum mentioned in the document, being a sum which if paid to him directly would not have been chargeable to income tax under Schedule E; or

(b) a savings certificate the accumulated interest payable in respect of which is exempt from tax (or would be so exempt if certain conditions were satisfied).

(4) Where—

(a) a voucher, stamp or similar document is capable of being exchanged (as mentioned above) for a sum of money substantially less than the expense incurred [F18 by the person at whose cost the voucher, stamp or similar document is provided], and

(b) the difference or part of the difference represents the cost to that person of providing benefits in connection with sickness, personal injury or death,

then, in determining whether the voucher, stamp or document is a cash voucher within the meaning of this section, [F19 the expense incurred by the person mentioned in paragraph (a) above shall be treated as reduced by the difference or part of the difference mentioned in paragraph (b) above.]

(5) M14 Subsection (1) above shall not apply to a cash voucher received by an employee if, at the time when the voucher is received, the scheme under which it was issued is a scheme approved by the Board for the purposes of this subsection; and the Board shall not approve a scheme for those purposes unless 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 regulations under section 203.

Textual Amendments

F16 Words in s. 143(1) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(9)

F17 Words in s. 143(3) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(10)

F18 Words in s. 143(4)(a) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(11)(a)

F19 Words in s. 143(4) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(11)(b)

Marginal Citations

M13 Source—1975 (No.2) s.37(1)-(4)

M14 Source—1975 (No.2) s.37(5); 1976 s.71(2)

144 Supplementary provisions. U.K.

(1) M15 If a person furnishes to the inspector a statement of the cases and circumstances in which non-cash vouchers [F20 , credit-tokens or cash vouchers] are provided for any employees (whether his own or those of anyone else) and the inspector is satisfied that no additional tax is payable under section [F21 141, 142 or 143] by reference to the vouchers or tokens mentioned in the statement, the inspector shall notify the person accordingly and nothing in those sections shall apply to the provision of those vouchers or tokens or their use.

(2) The inspector may, if in his opinion there is reason to do so, by notice served on the person to whom the notification under subsection (1) above was given, revoke the notification, either as from the date of its making or as from such later date as may be specified in the notice under this subsection; and all such income tax becomes chargeable, and all such returns are to be made by that person and by the employees in question, as would have been chargeable or would have had to be made in the first instance if the notification under subsection (1) above had never been given or, as the case may be, it had ceased to have effect on the specified date.

(3) M16 For the purposes of sections [F22 141, 142 and 143] where a person incurs expense in or in connection with the provision [F23 of] vouchers or credit-tokens for two or more employees as members of a group or class, the expense incurred in respect of any one of them shall be taken to be such part of that expense as is just and reasonable.

(4) M17 For the purposes of sections 141, 142 and 143 and this section—

(a) a non-cash voucher, cash voucher or credit-token provided for an employee by his employer shall be deemed to be provided for him by reason of his employment; and

(b) any reference to a non-cash voucher, cash voucher or credit-token being provided for or received by an employee includes a reference to it being provided for or received by a relation of his.

[F24 (4A) Section 142(1) has effect as if—

(a) use of a credit-token by a relation of an employee were use of the token by the employee, and

(b) money, goods or services obtained by a relation of an employee by use of a credit-token were money, goods or services obtained by the employee by the employee’s use of the token.]

(5) M18 In sections 141, 142, 143 and this section—

• “cash voucher” has the meaning given by section 143(3);

• “credit-token” has the meaning given by section 142(4);

• “employee” means the holder of any office or employment the emoluments in respect of which fall to be assessed under Schedule E; and related expressions shall be construed accordingly;

• “non-cash voucher” has the meaning given by section 141(7); and

• “relation”, with respect to an employee, means his spouse, parent or child, the spouse of his child and any dependant of that employee.

Textual Amendments

F20 Words in s. 144(1) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(13)(a)

F21 Words in s. 144(1) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(13)(b)

F22 Words in s. 144(3) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(14)(a)

F23 Word in s. 144(3) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 89(14)(b)

F24 S. 144(4A) inserted (with effect in accordance with s. 37(2) of the amending Act) by Finance Act 2002 (c. 23), s. 37(1), Sch. 6 para. 2

Marginal Citations

M15 Source—1975 (No.2) ss.36A(6), (7), 36(5A); 1981 s.71(1); 1982 s.44(6)

M16 Source—1975 (No.2) ss.36(5)(b), 36(A)(5)

M17 Source—1975 (No.2) ss.36(5)(c), (d), 36A(5), 37(6); 1981 s.70(5)(b)

M18 Source—1975 (No.2) ss.37(3), (6), 36(4), 36A(4B); 1982 ss.44(5), 45(3)

[F25 144A Payments etc. received free of tax. U.K.

(1) In any case where—

(a) an employer is treated, by virtue of any of sections 203B to 203I, as having made a payment of income of an employee which is assessable to income tax under Schedule E,

(b) the employer is required, by virtue of section 203J(3), to account for an amount of income tax (“the due amount”) in respect of that payment, and

(c) the employee does not, before the end of the period of thirty days from the date on which the employer is treated as making that payment, make good the due amount to the employer,

the due amount shall be treated as [F26 emoluments of the employment and charged to income tax under Schedule E for the tax year in which the date mentioned in paragraph (c) above falls].

(2) In this section any reference to an employer [F27 , in relation to any provision of sections 203B to 203J, is a reference to the person taken to be the employer for the purposes of that provision and] includes a reference to a person who is treated as making a payment by virtue of section 203C(2).]

Textual Amendments

F25 S. 144A inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 132

F26 Words in s. 144A(1) substituted (with effect in accordance with s. 37(2) of the amending Act) by Finance Act 2002 (c. 23), s. 37(1), Sch. 6 para. 4

F27 Words in s. 144A(2) inserted (with effect in accordance with s. 69(5) of the amending Act) by Finance Act 1998 (c. 36), s. 69(4) (with s. 69(6))