Income Tax (Earnings and Pensions) Act 2003

Income provided by means of vouchers and tokens U.K.

693 Cash vouchers U.K.

(1) If a cash voucher to which Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) applies is received by an employee at any time, the employer is to be treated, for the purposes of PAYE regulations, as making at that time a payment of PAYE income of the employee of an amount equal to the amount ascertained under section 81(2) (benefit of cash voucher treated as earnings).

(2) This section does not apply to the provision of a cash voucher if—

(a) the voucher is used to meet expenses, and

(b) if the amount for which the voucher is capable of being exchanged had been paid directly to the employee by his or her employer, the amount would not have been PAYE income except by virtue of section 70 (sums in respect of expenses).

(3) This section does not apply to the provision of a cash voucher if it is exchanged for an amount which—

(a) is used to meet expenses, and

(b) if it had been paid directly to the employee by the employer, would not have been PAYE income except by virtue of section 70.

(4) PAYE regulations may exclude from the scope of this section the provision of cash vouchers in circumstances specified in the regulations.

(5) 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 section as having been received by the employee at the time when it is appropriated.

694 Non-cash vouchers U.K.

(1) If a non-cash voucher to which this section applies is received by an employee, the employer is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount ascertained under section 87(2) (benefit of non-cash voucher treated as earnings).

(2) This section applies to a non-cash voucher to which Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) applies if—

(a) either of the conditions set out below is met with respect to the voucher, and

(b) the voucher is not of a description for the time being excluded from the scope of this section by PAYE regulations.

(3) The first condition is met with respect to a non-cash voucher if it is capable of being exchanged for anything which, if provided to the employee at the time when the voucher is received, would fall to be regarded as a readily convertible asset.

(4) The second condition is met with respect to a non-cash voucher if (but for section 701(2)(b)) it would fall itself to be regarded as a readily convertible asset.

(5) A payment under subsection (1) is made—

(a) in the case of a non-cash voucher other than a cheque voucher, at the time when the cost of provision is incurred or, if later, the time when the voucher is received by the employee;

(b) in the case of a cheque voucher, at the time when the voucher is handed over in exchange for money, goods or services.

(6) For the purposes of subsection (5)—

• “cheque voucher” has the same meaning as in Chapter 4 of Part 3;

• “cost of provision”, in relation to a voucher provided by an employer, has the meaning given by section 87;

• and a cheque voucher that is posted is to be treated as handed over at the time of posting.

(7) 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 section as having been received by the employee at the time when it is appropriated.

695 Credit-tokens U.K.

(1) On each occasion on which an employee uses a credit-token provided to the employee because of the employee’s employment to obtain—

(a) money, or

(b) anything which, if provided to the employee at the time when the credit-token is used, would fall to be regarded as a readily convertible asset,

the employer is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount ascertained under section 94(2) (benefit of credit-token treated as earnings).

(2) The use of a credit-token by an employee to obtain money is excluded from the scope of this section if the money—

(a) is used to meet expenses, and

(b) if it had been paid directly to the employee by the employer, would not have been PAYE income except by virtue of section 70 (sums in respect of expenses).

(3) PAYE regulations may make provision for excluding from the scope of this section any other description of use of a credit-token.