Textual Amendments
F1Pt. 5 Ch. 2 heading substituted by Finance Act 1989 (c. 26), s. 53(2)(a)
(1)This Chapter applies—
(a)to employment as a director of a company (but subject to subsection (5) below), and
(b)to employment with emoluments at the rate of £8,500 a year or more.
(2)For this purpose emoluments are to be calculated—
(a)on the basis that they include all such amounts as come, or would but for section 157(3) come, into charge under this Chapter or section 141, 142, 143 or 145, and
(b)without any deduction under section 198, 201 or 332(3).
[F3(2A)Where, by virtue of paragraph 15 of Schedule 7, the amount, or the total of the amounts, treated under section 160 as emoluments of a person exceeds what it would have been apart from that paragraph, then, for the purposes of subsection (2)(a) above there shall, instead of that excess, be brought into account an amount equal to the difference between—
(a)the amount by which his total income for the purposes of excess liability exceeds the basic rate limit; and
(b)what the amount referred to in paragraph (a) above would have been, apart from paragraph 15 of Schedule 7;
and in this subsection “excess liability” means the excess of liability to income tax over what it would be if all income tax [F4not chargeable at the lower rate]][F5by virtue of section 1(2)(aa) were charged at the basic rate, or (so far as applicable in accordance with section 207A) the lower rate,] to the exclusion of any higher rate.
(3)Where a person is employed in two or more employments by the same employer and either—
(a)the total of the emoluments of those employments (applying this section) is at the rate of £8,500 a year or more, or
(b)this Chapter applies (apart from this subsection) to one or more of those employments,
this Chapter shall apply to all the employments.
(4)All employees of a partnership or body over which an individual or another partnership or body has control are to be treated for the purposes of this section (but not for any other purpose) as if the employment were an employment by the individual or by that other partnership or body as the case may be.
(5)This Chapter shall not apply to a person’s employment by reason only of its being employment as a director of a company (without prejudice to its application by virtue of subsection (1)(b) or (3) above) if he has no material interest in the company and either—
(a)his employment is as a full-time working director; or
(b)the company is non-profit-making (meaning that neither does it carry on a trade nor do its functions consist wholly or mainly in the holding of investments or other property) or is established for charitable purposes only.]
Textual Amendments
F2S. 167 substituted by Finance Act 1989 (c. 26), s. 53(1).Previously
“Meaning of “director's or higher-paid employment”.167.—(1) In this Chapter “director's or higher-paid employment” means—(a) subject to subsection (5) below, employment as a director of a company; or (b) employment with emoluments at the rate of £8,500 a year or more. (2) For this purpose emoluments are to be calculated—(a) on the basis that they include all such amounts as come or would but for section 157(3) come into charge under this Chapter or section 141, 142, 143 or, in the case of those in director's or higher-paid employment, 145; and (b) without any deduction under section 198, 201 or 332(3). (3) Where a person is employed in two or more employments by the same employer and either—(a) the total of the emoluments of those employments (applying this section) is at the rate of £8,500 a year or more; or (b) one or more of those employments is (apart from this subsection) director's or higher-paid, all the employments are to be treated as director's or higher-paid. (4) All employees of a partnership or body over which an individual or another partnership or body has control are to be treated for the purposes of this section (but not for any other purpose) as if the employment were an employment by the individual or by that other partnership or body as the case may be. (5) A person's employment is not director's or higher-paid by reason only of its being employment as a director of a company (without prejudice to its being so under subsection (1)(b) or (3) above) if he has no material interest in the company and either—(a) his employment is as a full-time working director; or (b) the company is non-profit-making (meaning that neither does it carry on a trade nor do its functions consist wholly or mainly in the holding of investments or other property) or is established for charitable purposes only.”.
F3S. 167(2A) inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 27(6), Sch. 6 para. 2 (for year 1991-92 and subsequent years of assessment)
F4Words in s. 167(2A) inserted (16.7.1992 with application for the year 1992-93 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 19(3)(7).
F5Words in s. 167(2A) substituted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by 1993 c. 34, s. 79, Sch. 6 paras.1, 25(1)