http://www.legislation.gov.uk/id/ukpga/2003/1

Part 4Employment income: exemptions

i

section 542 (priority share allocations: exemption where offer made to public and employees), and

j

section 544 (priority share allocations: exemption where different offers made to public and employees).

F1535

In relation to the interaction between this Part and Part 7A, see section 554P(1).

228Effect of exemptions on liability under provisions outside Part 2

1

The exemptions conferred by the provisions specified in subsection (2) prevent liability to income tax arising under any enactment, but the other exemptions in this Part only affect liability to income tax under Part 2 of this Act.

2

The provisions referred to in subsection (1) are—

a

section 245 (travelling and subsistence during public transport strikes),

b

section 248 (transport home: late night working and failure of car-sharing arrangements),

c

section 264 (annual parties and functions),

d

Chapter 8 of this Part (exemptions for special kinds of employees) except for sections F197290, 290C to 291 F196and 306A ,

F216da

section 308B (independent advice in respect of conversions and transfers of pension scheme benefits),

F245db

section 308C (provision of pensions advice),

e

section 323 (long service awards),

f

section 324 (small gifts from third parties), and

g

section 326 (expenses incidental to transfer of a kind not normally met by transferor).

228AF241General exclusion from exemptions: optional remuneration arrangements

1

A relevant exemption does not apply (whether to prevent liability to income tax from arising or to reduce liability to income tax) in respect of a benefit or facility so far as the benefit or facility is provided pursuant to optional remuneration arrangements.

2

For the purposes of subsection (1) it does not matter whether the relevant exemption would (apart from that subsection) have effect as an employment income exemption or an earnings-only exemption.

3

For the purposes of this section an exemption conferred by this Part is a “relevant exemption” unless it is—

a

a special case exemption (see subsection (4)), or

b

an excluded exemption (see subsection (5)).

4

“Special case exemption” means an exemption conferred by any of the following provisions—

a

section 289A (exemption for paid or reimbursed expenses);

b

section 289D (exemption for other benefits);

c

section 308B (independent advice in respect of conversions and transfers of pension scheme benefits);

d

section 312A (limited exemption for qualifying bonus payments);

e

section 317 (subsidised meals);

f

section 320C (recommended medical treatment);

g

section 323A (trivial benefits provided by employers).

5

“Excluded exemption” means an exemption conferred by any of the following provisions—

a

section 239 (payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles);

b

section 244 (cycles and cyclist's safety equipment);

c

section 266(2)(c) (non-cash voucher regarding entitlement to exemption within section 244);

d

section 270A (limited exemption for qualifying childcare vouchers);

e

section 307 (death or retirement provision), so far as relating to provision made for retirement benefits;

f

section 308 (exemption of contribution to registered pension scheme);

g

section 308A (exemption of contributions to overseas pension scheme);

h

section 308C (provision of pensions advice);

i

section 309 (limited exemptions for statutory redundancy payments);

j

section 310 (counselling and other outplacement services);

k

section 311 (retraining courses);

l

section 318 (childcare: exemption for employer-provided care);

m

section 318A (childcare: limited exemption for other care).

6

In subsection (5) “retirement benefit” has the meaning that would be given by subsection (2) of section 307 if “or death” were omitted in both places where it occurs in that subsection.

7

In this section “benefit or facility” includes anything which constitutes employment income or in respect of which employment income is treated as arising to the employee (regardless of its form and the manner of providing it).

8

In this section “optional remuneration arrangements” has the same meaning as in the benefits code (see section 69A).

9

The Treasury may by order amend subsections (4) and (5) by adding or removing an exemption conferred by Part 4.

Chapter 2Exemptions: mileage allowances and passenger payments

Mileage allowances

229Mileage allowance payments

1

No liability to income tax arises in respect of approved mileage allowance payments for a vehicle to which this Chapter applies (see section 235).

2

Mileage allowance payments are amounts, other than passenger payments (see section 233), paid to an employee for expenses related to the employee’s use of such a vehicle for business travel (see F217sections 235A and 236(1)).

3

Mileage allowance payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee for the kind of vehicle in question does not exceed the approved amount for such payments applicable to that kind of vehicle (see section 230).

4

Subsection (1) does not apply if—

a

the employee is a passenger in the vehicle, or

b

the vehicle is a company vehicle (see section 236(2)).

230The approved amount for mileage allowance payments

1

The approved amount for mileage allowance payments that is applicable to a kind of vehicle is—

M \times R

where—

M is the number of miles of business travel by the employee (other than as a passenger) using that kind of vehicle in the tax year in question;

R is the rate applicable to that kind of vehicle.

2

The rates applicable are as follows—

Table

Kind of vehicle	Rate per mile
Car or van	F13045p for the first 10,000 miles
	25p after that
Motor cycle	24p
Cycle	20p

3

The reference in subsection (2) to “the first 10,000 miles” is to the total number of miles of business travel in relation to the employment, or any associated employment, by car or van in the tax year in question.

4

One employment is associated with another if—

a

the employer is the same;

b

the employers are partnerships or bodies and an individual or another partnership or body has control over both of them; or

c

the employers are associated companies within the meaning F113given by section 449 of CTA 2010.

5

In subsection (4)(b)—

a

“control”, in relation to a body corporate or partnership, has the meaning given by F71section 995 of ITA 2007 (in accordance with section 719 of this Act), and

b

the definition of “control” in that section of that Act applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate.

6

The Treasury may by regulations amend subsection (2) so as to alter the rates or rate bands.

that subsection (2)(b) does not apply, and

b

where applicable, that the earnings constitute taxable earnings in the tax year in which the employee receives them.

5

Subsection (3) applies only to the extent that the mileage allowance relief cannot be deducted under subsection (2).

6

A deduction shall not be made twice, whether under subsection (2) or (3), in respect of the same mileage allowance relief.

F1816A

If the earnings from which a deduction allowed under this section is deductible include earnings that are “excluded” within the meaning of section 15(1A)—

a

the amount of the deduction allowed is a proportion of the amount that would be allowed under this section if the tax year were not a split year, and

b

that proportion is equal to the proportion that the part of the earnings that is not “excluded” bears to the total earnings.

7

In this section “taxable earnings” or “net taxable earnings” means taxable earnings or net taxable earnings from the employment for the purposes of Part 2.

Passenger payments

233Passenger payments

1

No liability to income tax arises in respect of approved passenger payments made to an employee for the use of a car or van (whether or not it is a company vehicle) if—

a

the employee receives mileage allowance payments for the use of the car or van, and

b

the cash equivalent of the benefit of the car or van is treated as earnings from the employment by virtue of section 120 or 154 (cars and vans as benefits).

This is subject to subsection (2).

2

The condition in subsection (1)(b) needs to be met only if the car or van is made available to the employee by reason of the employment.

3

Passenger payments are amounts paid to an employee because, while using a car or van for business travel, the employee carries in it one or more passengers who are also employees for whom the travel is business travel.

4

Passenger payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee does not exceed the approved amount for such payments (see section 234).

5

Section 117 (when cars and vans are made available by reason of employment) applies for the purposes of subsection (2).

234The approved amount for passenger payments

1

The approved amount for passenger payments is—

M \times R

where—

M is the number of miles of business travel by the employee by car or van—

(a) for which the employee carries in the tax year in question one or more passengers who are also employees for whom the travel is business travel, and
(b) in respect of which passenger payments are made;

R is a rate of 5p per mile.

2

If the employee carries for all or part of the tax year two or more passengers who are also employees for whom the travel is business travel, the approved amount for passenger payments is the total of the amounts calculated separately under subsection (1) in respect of each of those passengers.

3

The Treasury may by regulations amend subsection (1) so as to alter the rate.

Supplementary

235Vehicles to which this Chapter applies

1

This Chapter applies to cars, vans, motor cycles and cycles.

2

“Car” means a mechanically propelled road vehicle which is not—

a

a goods vehicle,

b

a motor cycle, or

c

a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.

3

“Van” means a mechanically propelled road vehicle which—

a

is a goods vehicle, and

b

has a design weight not exceeding 3,500 kilograms,

and which is not a motor cycle.

4

“Motor cycle” has the meaning given by section 185(1) of the Road Traffic Act 1988 (c. 52).

5

“Cycle” has the meaning given by section 192(1) of that Act.

6

In this section—

“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;
“goods vehicle” means a vehicle of a construction primarily suited for the conveyance of goods or burden of any description.

define what is meant by “qualifying payment” for the purposes of this section.

7

The regulations may contain transitional provision and savings.

236Interpretation of this Chapter

1

In this Chapter—

“business travel” means travelling the expenses of which, if incurred and paid by the employee in question, would (if this Chapter did not apply) be deductible under sections 337 to 342;
“mileage allowance payments” has the meaning given by section 229(2);
“passenger payments” has the meaning given by section 233(3).

F2181A

For journeys that are treated as business travel for the purposes of certain provisions of this Chapter, see section 235A (journeys made by members of local authorities etc).

2

For the purposes of this Chapter a vehicle is a “company vehicle” in a tax year if in that year—

a

the vehicle is made available to the employee by reason of the employment and is not available for the employee’s private use, or

b

F234an amount in respect of the benefit of the vehicle is to be treated as the employee’s earnings for the tax year by virtue of—

i

section 120 F235or 120A (benefit of car treated as earnings),

ii

section 154 F236or 154A (benefit of van treated as earnings), or

iii

section 203 F237or 203A (residual liability to charge: benefit treated as earnings), or

c

in the case of a car or van, F233an amount in respect of the benefit of the car or van would be required to be so treated if sections 167 and 168 (exceptions for pooled cars and vans) F19and section 248A (emergency vehicles) did not apply, or

d

in the case of a cycle, the cash equivalent of the benefit of the cycle would be required to be treated as the employee’s earnings for the tax year under Chapter 10 of Part 3 (taxable benefits: residual liability to charge) if section 244(1) (exception for cycles made available) did not apply.

3

Sections 117 and 118 (when cars and vans are made available by reason of employment and are made available for private use) apply for the purposes of subsection (2).

Chapter 3Exemptions: other transport, travel and subsistence

237Parking provision and expenses

1

F27No liability to income tax arises in respect of the provision of workplace parking for an employee.

2

No liability to income tax arises by virtue of the payment or reimbursement of expenses incurred in connection with the provision for or the use by an employee of workplace parking.

3

In this section “workplace parking” means—

a

a F20parking space for a car or van,

b

a motor cycle parking space, or

c

facilities for parking a cycle other than a motor cycle,

at or near the employee’s workplace.

238Modest private use of heavy goods vehicles

1

No liability to income tax arises where a heavy goods vehicle is made available to an employee for the employee’s private use if conditions A and B are met.

2

Condition A is that there is no transfer of the property in the vehicle to the employee.

3

Condition B is that the employee’s use of the vehicle in the tax year is not wholly or mainly private use.

4

In this section—

“heavy goods vehicle” means a mechanically propelled road vehicle which—
1. a
  is of a construction primarily suited for the conveyance of goods or burden of any kind, and
2. b
  is designed or adapted to have a maximum weight exceeding 3,500 kilograms when in normal use and travelling on a road laden, and
“private use” means use other than for travel which the employee is necessarily obliged to do in the performance of the duties of the employment.

239Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles

1

No liability to income tax arises in respect of the discharge of any liability of an employee in connection with a taxable car or van or an exempt heavy goods vehicle.

2

No liability to income tax arises in respect of a payment to an employee in respect of expenses incurred by the employee in connection with a taxable car or van or an exempt heavy goods vehicle.

3

Subsections (1) and (2) do not apply to liability arising by virtue of section 149 F238or 149A (benefit of car fuel treated as earnings) F83or section 160 F239or 160A (benefit of van fuel treated as earnings).

4

No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit connected with a taxable car or van or an exempt heavy goods vehicle.

5

Subsection (4) does not apply to the provision of a driver.

6

For the purposes of this section a car or van is “taxable” if under Chapter 6 of Part 3 F240an amount (whether the cash equivalent or the relevant amount) in respect of the benefit of it is to be treated as the employee’s earnings for the tax year.

7

For the purposes of this section—

a

“heavy goods vehicle” has the same meaning as in section 238(4) (modest private use of heavy goods vehicles), and

b

a heavy goods vehicle is “exempt” if it is made available in the tax year to the employee in such circumstances that section 238 applies.

8

For the purposes of subsections (1) and (2), a heavy goods vehicle is also “exempt” if it is so made available in such circumstances that section 238 would apply if the employee were not in F198lower-paid employment as a minister of religion (see section 290D).

F1999

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240Incidental overnight expenses and benefits

b

section 374 (non-domiciled employee’s spouse’s F44civil partner's or child’s travel costs and expenses where duties performed in UK), and

c

section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)).

241Incidental overnight expenses and benefits: overall exemption limit

1

Section 240(1) and (2) do not apply if the exemption provisions total in respect of the qualifying period in question exceeds the permitted amount.

2

In this section “the exemption provisions total”, in respect of a period, means the aggregate of—

a

the amounts that would be exempted under section 240(1) and (2) in respect of the period, apart from this section, and

b

the amounts that would be exempted under section 268 (exemption of vouchers and tokens for incidental overnight expenses) in respect of the period, apart from the condition in section 268(5).

3

In this section “the permitted amount”, in respect of a period, means the aggregate of the following amounts—

a

£5 for each night during the period spent wholly in the United Kingdom, and

b

£10 for each night during the period spent wholly or partly outside the United Kingdom.

241AF188Travel by unpaid directors of not-for-profit companies

1

No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing travel expenses in respect of which conditions A to C are met.

2

Condition A is that—

a

the employee is obliged to incur the expenses as holder of the employment, and

b

the expenses are attributable to the employee’s necessary attendance at any place in the performance of the duties of the employment.

3

Condition B is that the employment is employment as a director of a not-for-profit company.

4

Condition C is that the employment is one from which the employee receives no employment income other than sums to which Chapter 3 of Part 3 applies (expenses payments).

5

In this section—

a

“director” has the same meaning as in the benefits code (see section 67), and

b

“not-for-profit company” means a company that does not carry on activities for the purpose of making profits for distribution to its members or others.

241BTravel where directorship held as part of trade or profession

1

2

Condition A is that the employee is obliged to incur the expenses as holder of the employment.

3

Condition B is that the employment is employment as a director of a company.

4

Condition C is that the employee carries on a trade, profession or vocation (alone or in partnership).

5

Condition D is that, in calculating the profits of that trade, profession or vocation for income tax purposes, a deduction is allowed under ITTOIA 2005 for the expenses, but no such deduction is to be made.

6

In this section “director” has the same meaning as in the benefits code (see section 67).

242Works transport services

1

No liability to income tax arises in respect of the provision for employees of a works transport service if—

a

the service is available generally to employees of the employer (or each employer) concerned,

b

the main use of the service is for qualifying journeys by those employees, and

c

the service—

i

is used only by the employees for whom it is provided or their children, or

ii

is substantially used only by those employees or children.

2

In this section—

“children” includes stepchildren and illegitimate children but does not include children aged 18 or over, and
“works transport service” means a service which is provided by means of a bus or a minibus for conveying employees of one or more employers on qualifying journeys.

3

For the purposes of this section—

a

“bus” means a road passenger vehicle which has a seating capacity of 12 or more, and

b

“minibus” means a vehicle constructed or adapted for the carriage of passengers which has a seating capacity of 9, 10 or 11.

4

But a vehicle which falls within the definition in subsection (3)(b) is not a minibus for the purposes of this section if—

a

it has one or more disqualified seats, and

b

excluding the disqualified seats, it has a seating capacity of 8 or less.

5

For the purposes of subsections (3) and (4) the seating capacity of a vehicle is determined in the same way as for the purposes of Part 3 of Schedule 1 to VERA 1994 (vehicle excise duty on buses).

This applies whether or not the vehicle is a bus within the meaning of that Part of that Schedule.

6

For the purposes of subsection (4) a seat is disqualified if relevant construction and use requirements are not met in relation to it.

In this subsection “construction and use requirements” has the same meaning as in Part 2 of the Road Traffic Act 1988 (c. 52) or, in Northern Ireland, Part III of the Road Traffic (Northern Ireland) Order 1995 (S.I. 1995/2994 (N.I. 18)).

243Support for public bus services

1

No liability to income tax arises in respect of the provision of financial or other support for a public transport road service if—

a

in the case of a local bus service, conditions A and B are met, or

b

in any other case, conditions A to C are met.

2

Condition A is that the service is used by employees of one or more employers for qualifying journeys.

3

Condition B is that the service is available generally to employees of the employer (or each employer) concerned.

4

Condition C is that the terms on which the service is available to the employees of the employer (or each employer) concerned are not more favourable than those available to other passengers.

5

In this section—

“local bus service” means a local service (as defined in section 2 of the Transport Act 1985 (c. 67)), and
“public transport road service” means a public passenger transport service provided by means of a road vehicle.

244Cycles and cyclist’s safety equipment

1

F32No liability to income tax arises in respect of the provision for an employee of a cycle or cyclist’s safety equipment if conditions A to C are met.

2

Condition A is that there is no transfer of the property in the cycle or equipment in question.

3

Condition B is that the employee uses the cycle or equipment in question mainly for qualifying journeys.

4

Condition C is that cycles are available generally to employees of the employer concerned or, as the case may be, cyclist’s safety equipment is so available to them.

5

In this section “cycle” has the meaning given by section 192(1) of the Road Traffic Act 1988 (c. 52), and “cyclist” has a corresponding meaning.

245Travelling and subsistence during public transport strikes

1

No liability to income tax arises in respect of the following benefits and payments where a strike or other industrial action disrupts a public transport service normally used by an employee.

2

They are—

a

the provision for the employee of overnight accommodation at or near the employee’s permanent workplace,

b

a payment to the employee in respect of expenses incurred by the employee in connection with such accommodation,

c

the provision for the employee of transport for the purpose of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting, and

d

a payment to the employee in respect of expenses incurred on such transport.

246Transport between work and home for disabled employees: general

1

No liability to income tax arises in respect of—

a

the provision of transport for a disabled employee, or

b

the payment or reimbursement of expenses incurred on such transport,

if the condition in subsection (2) is met.

2

The condition is that the transport is provided or the expenses are incurred for the purpose of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.

3

Subsection (1) does not apply in a case where a car is made available to a disabled employee (but see section 247).

4

In this section “disabled employee” means an employee who has a physical or mental impairment with a substantial and long-term adverse effect on the employee’s ability to carry out normal day to day activities.

247Provision of cars for disabled employees

1

This section applies where a car is made available to a disabled employee without any transfer of the property in it.

2

No liability to income tax arises by virtue of Chapter 6 or 10 of Part 3 (taxable benefits: cars, vans etc. and residual liability to charge) in respect of the benefit if conditions A to C are met.

3

No liability to income tax arises in respect of—

a

the provision of fuel for the car, or

b

the payment or reimbursement of expenses incurred in connection with it,

if conditions A to C are met.

4

Condition A is that the car has been adapted for the employee’s special needs or, in the case of an employee who because of disability can only drive a car that has automatic transmission, it is such a car.

5

Condition B is that the car is made available on terms prohibiting its use otherwise than for—

a

the employee’s business travel, or

b

transport for the employee for the purpose of—

i

ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting, or

ii

travel to a place the expenses of travelling to which would be within one of the training exemption provisions if the employer paid them.

6

Condition C is that in the tax year the car is only used in accordance with those terms.

7

In this section—

“business travel” has the same meaning as in Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits) (see section 171(1)),
“disabled employee” has the same meaning as in section 246 (see subsection (4)), and
“the training exemption provisions” means—
section 250 (exemption of work-related training provision),
section 255 (exemption for contributions to individual learning account training), and
section 311 (retraining courses).

8

Section 138(4) (when a car has automatic transmission) applies for the purposes of this section as it applies for the purposes of section 138.

8

A person to whom an emergency vehicle is made available is engaged in on-call commuting when the person—

a

is using it for ordinary commuting or for travel between two places that is for practical purposes substantially ordinary commuting, and

b

is required to do so in order that it is available for use by the person, as part of normal duties, for responding to emergencies.

249Interpretation of this Chapter

In this Chapter—

“car” and “van” have the same meaning as in Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits) (see section 115), except that for the purposes of sections 246 and 247 (transport for the disabled) any adaptation of a car for the employee’s special needs is to be disregarded,
“ordinary commuting” has the same meaning as in section 338 (travel for necessary attendance) (see subsection (3)),
“qualifying journey”, in relation to an employee, means the whole or part of a journey—
1. a
  between the employee’s home and workplace,
2. b
  between one workplace and another,
in connection with the performance of the duties of the employment, and
“workplace” and “permanent workplace” have the meaning given by section 339.

Chapter 4Exemptions: education and training

Work-related training

250Exemption of work-related training provision

1

No liability to income tax arises by virtue of—

a

the provision for an employee of work-related training or any benefit incidental to such training, or

b

the payment or reimbursement to or in respect of an employee of—

i

the cost of work-related training or of any benefit incidental to such training, or

ii

any costs of a kind specified in subsection (2) in respect of such training.

2

The costs are—

a

costs which are incidental to the employee undertaking the training,

b

expenses incurred in connection with an examination or other assessment of what the employee has gained from the training, and

c

the cost of obtaining any qualification, registration or award to which the employee becomes or may become entitled as a result of the training or such an examination or other assessment.

251Meaning of “work-related training”

1

In this Chapter “work-related training”, in relation to an employee, means a training course or other activity designed to impart, instil, improve or reinforce any knowledge, skills or personal qualities which—

a

are likely to prove useful to the employee when performing the duties of the employment or a related employment, or

b

will qualify or better qualify the employee—

i

to perform those duties, or

ii

to participate in any charitable or voluntary activities that are available to be performed in association with the employment or a related employment.

2

For this purpose “related employment”, in relation to an employee, means another employment with the same employer, or with a person connected with the employer, which the employee—

a

is to hold,

b

has a serious opportunity of holding, or

c

can realistically expect to have a serious opportunity of holding in due course.

252Exception for non-deductible travel expenses

1

Where travel or subsistence is provided or the costs of travel or subsistence are paid or reimbursed, section 250 does not apply except to the extent that the travel meets condition A or B or the subsistence meets condition B.

2

Condition A is that, on the assumptions in subsection (4), mileage allowance relief under Chapter 2 of this Part would be available for the travel if no mileage allowance payments had been made.

3

Condition B is that, on those assumptions, the expenses of the travel or subsistence would be deductible under Part 5.

4

The assumptions are—

a

that the employee undertook the training as one of the duties of the employment, and

b

that the employee incurred and paid the expenses.

5

In this section—

“mileage allowance payments” has the meaning given by section 229(2), and
“subsistence” includes food, drink and temporary living accommodation.

253Exception where provision for excluded purposes

1

Section 250 does not apply if or to the extent that the facilities or other benefits that are provided or the costs of which are paid or reimbursed are provided to the employee for one or more of the following purposes.

2

They are—

a

enabling the employee to enjoy the facilities or benefits for entertainment or recreational purposes which are unconnected,

b

providing the employee with an unconnected inducement to remain in or accept an employment with the employer or a person connected with the employer, and

c

rewarding the employee for performing duties of the employment or performing them in a particular way.

3

In subsection (2)(a) the reference to enjoying facilities or benefits for entertainment or recreational purposes includes a reference to enjoying them in the course of a leisure activity.

4

In subsection (2)(a) and (b) “unconnected” means unconnected with imparting, instilling, improving or reinforcing knowledge, skills or personal qualities within section 251(1).

254Exception where unrelated assets are provided

Where travel or subsistence is provided or the costs of travel or subsistence are paid or reimbursed, section 255 does not apply except to the extent that the travel meets condition A or B or the subsistence meets condition B.

2

Condition A is that, on the assumptions in subsection (4), mileage allowance relief under Chapter 2 of this Part would be available for the travel if no mileage allowance payments had been made.

3

Condition B is that, on those assumptions, the expenses of the travel or subsistence would be deductible under Part 5.

4

The assumptions are—

a

that the employee undertook the training as one of the duties of the employment, and

b

that the employee incurred and paid the expenses.

5

In this section—

“mileage allowance payments” has the meaning given by section 229(2), and
“subsistence” includes food, drink and temporary living accommodation.

258Exception where provision for excluded purposes

1

Section 255 does not apply if or to the extent that the facilities or other benefits that are provided or made available, or the costs of which are paid or reimbursed, are provided or made available for either or both of the following purposes.

2

They are—

a

enabling the employee or former employee to enjoy the facilities or benefits for entertainment or recreational purposes, and

b

rewarding the employee or former employee for performing duties of the employment or former employment or performing them in a particular way.

3

In subsection (2)(a) the reference to enjoying facilities or benefits for entertainment or recreational purposes includes a reference to enjoying them in the course of a leisure activity.

259Exception where unrelated assets are provided

1

Section 255 does not apply if the benefit that is provided, or the use of which is provided, or the cost of which is paid or reimbursed is an asset that is not a training-related asset.

2

“Training-related asset”, in relation to individual learning account training provided to an employee or former employee, means—

a

an asset provided—

i

for use only in the course of the training, or

ii

for use in the course of the training and in the performance of the duties of the employee’s employment, but not to any significant extent for any other use, or

b

training materials provided in the course of the training, or

c

something made by the employee or former employee in the course of the training or incorporated into something so made.

3

For this purpose “training materials” includes stationery, books or other written material, audio or video tapes, compact disks or floppy disks.

260Exception where training not generally available to staff

1

Section 255(1) only applies if any expenditure involved in making the provision, the payment or the reimbursement is incurred in giving effect to existing arrangements providing—

a

for the person incurring it to contribute to costs arising from the undertaking of individual learning account training by the employer’s employees or former employees, and

b

for such contributions to be generally available, on similar terms, to the employer’s employees at that time.

2

In subsection (1) “existing arrangements” means arrangements in place when the agreement to incur the expenditure was made.

3

The Treasury may by regulations make provision specifying the persons or other entities under whom Crown servants are to be treated for the purposes of this section as holding employment.

4

Such regulations may—

a

treat a description of Crown servants (or two or more such descriptions taken together) as an entity for the purposes of the regulations, and

b

make different provision for different descriptions of Crown servants.

5

In this section “Crown servant” means a person holding an employment under the Crown.

Chapter 5Exemptions: recreational benefits

Recreational facilities

261Exemption of recreational benefits

1

No liability to income tax arises in respect of the provision to an employee or a member of an employee’s family or household of benefits within subsection (2).

2

The benefits are—

a

sporting or other recreational facilities which meet conditions A to C, and

b

a right or opportunity to make use of such facilities.

This is subject to section 262.

3

Condition A is that the facilities are available generally to the employees of the employer in question.

4

Condition B is that they are not available to members of the public generally.

5

Condition C is that they are used wholly or mainly by persons whose right or opportunity to use them is employment-related (whether or not by reference to the same employer).

6

A person’s right or opportunity to use facilities is “employment-related” if and only if—

a

it derives from the person being—

i

an employee or former employee, or

ii

a member or former member of the family or household of an employee or former employee,

of a particular employer, and

b

the facilities are provided so as to be available generally to that employer’s employees.

262Benefits not exempted by section 261

1

Section 261 (exemption of recreational benefits) does not apply to the following benefits—

a

an interest in or the use of any of the following—

i

a mechanically propelled vehicle,

ii

holiday or other overnight accommodation, or

iii

facilities which include, or are provided in association with, a right or opportunity to make use of holiday or overnight accommodation,

b

facilities provided on domestic premises, or

c

a right or opportunity to make use of facilities within paragraph (a) or (b).

2

In this section—

“domestic premises” means—
1. a
  premises used wholly or mainly as a private dwelling, or
2. b
  land or other premises belonging to, or enjoyed with, premises so used, and
“vehicle” includes a ship, boat or other vessel, an aircraft and a hovercraft.

263Power to alter benefits to which section 261 applies

The Treasury may by regulations provide that section 261—

a

does not apply to a benefit specified in the regulations,

b

applies to a benefit so specified only where such conditions as the regulations specify are met in relation to the terms on which, and the persons to whom, it is provided, or

c

applies in such cases as are so specified to—

i

facilities that do not meet the conditions in section 261(3) to (5), or

ii

a benefit within section 262.

Annual parties and functions

264Annual parties and functions

1

This section applies to an annual party or similar annual function provided for an employer’s employees and available to them generally or available generally to those at a particular location.

2

Where in the tax year only one annual party or similar annual function to which this section applies is provided for the employer’s employees, or the employees in question, no liability to income tax arises in respect of its provision if the cost per head of the party or function does not exceed F1£150.

3

Where in the tax year two or more such parties or functions are so provided, no liability to income tax arises in respect of the provision of one or more of them (“the exempt party or parties”) if the cost per head of the exempt party or parties does not exceed F2£150 or F2£150 in aggregate.

4

For the purposes of this section, the cost per head of a party or function is the total cost of providing—

a

the party or function, and

b

any transport or accommodation incidentally provided for persons attending it (whether or not they are the employer’s employees),

divided by the number of those persons.

5

That total cost includes any value added tax on the expenses incurred in providing the party, function, transport or accommodation.

Entertainment

265Third party entertainment

1

No liability to income tax arises in respect of the provision of entertainment for an employee or a member of the employee’s family or household if conditions A to C are met.

2

Condition A is that the person providing the entertainment is not the employer or a person connected with the employer.

3

Condition B is that neither the employer nor a person connected with the employer has directly or indirectly procured its provision.

4

Condition C is that it is not provided—

a

in recognition of particular services performed by the employee in the course of the employment, or

b

in anticipation of particular services to be so performed.

5

In this section “entertainment” includes hospitality of any kind.

Chapter 6Exemptions: non-cash vouchers and credit-tokens

General exemptions: use for exempt benefits

266Exemption of non-cash vouchers for exempt benefits

1

No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if or to the extent that the voucher is used to obtain anything the direct provision of which would fall within—

a

section 237(1) (parking provision),

b

section 246 (transport between home and work for disabled employees: general),

c

section 247 (provision of cars for disabled employees),

d

section 248 (transport home: late night working and failure of car-sharing arrangements), F193...

e

section 265 (third party entertainment)F194, or

f

section 320C (recommended medical treatment);

2

a

section 242 (works transport services),

b

section 243 (support for public bus services), F56...

c

section 244 (cycles and cyclist’s safety equipment), F57or

d

section 319 (mobile telephones).

3

No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if the voucher can only be used to obtain anything the direct provision of which would fall within—

a

section 245 (travelling and subsistence during public transport strikes),

b

section 261 (exemption of recreational benefits),

c

section 264 (annual parties and functions),

d

section 296 (armed forces' leave travel facilities), F58...

e

section 317 (subsidised meals) F59, F101...

f

section 320A (eye tests and special corrective appliances)F102or

g

section 320B (health screening and medical check-ups).

4

No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if the voucher evidences the employee’s entitlement to a benefit in respect of which no charge arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) because of regulations under section 210 (power to exempt minor benefits).

5

For the purposes of this section direct provision is taken to fall within a section if it would do so if the employee were not in F209lower-paid employment as a minister of religion.

267Exemption of credit-tokens used for exempt benefits

1

a heavy goods vehicle is “exempt” if it is made available in the tax year to the employee in such circumstances that section 238 applies or would apply if the employee were not in F211lower-paid employment as a minister of religion.

270Exemption for small gifts of vouchers and tokens from third parties

1

No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if conditions A to C are met.

2

Condition A is that the voucher or token is provided as a gift.

3

Condition B is that it is only capable of being used to obtain goods.

4

Condition C is that it meets conditions A to C and E in section 324 (general exemption of small gifts from third parties).

270AF14Limited exemption for qualifying childcare vouchers

1

If qualifying childcare vouchers are provided for an F225eligibleF30employee—

a

no liability to income tax arises by virtue of section 62 (general definition of earnings), and

b

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

5B

In subsection (5A)—

“relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the vouchers;
“relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided agree with the employer that they are to be provided with the vouchers rather than receive some other description of employment income;
“relevant low-paid employees” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.

F1385C

Condition D is that the employer has, at the required time, made an estimate of the employee's relevant earnings amount for the tax year in respect of which the voucher is provided (see section 270B).

6

For the purposes of this section the “exempt amount”, in any tax year, is F31the sum of—

a

F140the appropriate amount for each qualifying week in that year, and

b

the voucher administration costs for that year.

F1396ZA

In subsection (6)(a) “the appropriate amount”, in the case of an employee, means—

a

if the relevant earnings amount in the case of the employee for the tax year, as estimated in accordance with subsection (5C), exceeds the higher rate limit for the tax year, F175£25 ,

b

if the relevant earnings amount in the case of the employee for the tax year, as so estimated, exceeds the basic rate limit for the tax year but does not exceed the higher rate limit for the tax year, £28, and

c

otherwise, £55.

F286A

The “voucher administration costs” for any tax year in respect of which qualifying childcare vouchers are provided for an employee means the difference between the cost of provision of the vouchers and their face value.

The face value of a voucher is the amount stated on or recorded in the voucher as the value of the provision of care for a child that may be obtained by using it.

7

A “qualifying week” means a tax week in respect of which a qualifying childcare voucher is received.

A “tax week” means one of the successive periods in a tax year beginning with the first day of that year and every seventh day after that (so that the last day of a tax year or, in the case of a tax year ending in a leap year, the last two days is treated as a separate week).

8

An employee is only entitled to one exempt amount even if care is provided for more than one child.

But it does not matter that another person may also be entitled to an exempt amount in respect of the same child.

9

An employee is not entitled to an exempt amount under this section and under section 318A (limited exemption for employer-contracted childcare) in respect of the same tax week.

10

In this section “care”, “child”, “parental responsibility” and “qualifying child care” have the same meaning as in section 318A (see sections 318B and 318C).

F2910A

In this section “ cost of provision”, in relation to a childcare voucher, has the meaning given in section 87(3) and (3A).

11

The powers conferred by section 318D (childcare: power to vary F142amounts and qualifying conditions) are exercisable—

a

in relation to the F142amounts specified in subsection F143(6ZA) above as in relation to the F142amounts specified in section F144318A(6A) , and

b

in relation to the qualifying conditions for the exemption conferred by this section as in relation to the qualifying conditions for the exemption conferred by section 318A.

270AAF231Meaning of “eligible employee”

1

An employee is an eligible employee for the purposes of section 270A if conditions A to C are met in relation to the employee.

2

Condition A is that the employee—

a

was employed by the employer immediately before the relevant day, and

b

has not ceased to be employed by the employer on or after that day.

3

“The relevant day” means the day specified by the Treasury in regulations for the purposes of this section.

4

Condition B is that there has not been a period of 52 tax weeks ending on or after the relevant day which has not included at least one qualifying week.

5

In subsection (4)—

“qualifying week” means a tax week in respect of which a qualifying childcare voucher has been provided for the employee under the scheme by the employer in respect of a child, and
“tax week” has the meaning given by section 270A(7).

6

Condition C is that the employee has not given the employer a childcare account notice.

7

A “childcare account notice” is a written notice informing the employer that the employee wishes to leave the scheme in order to be able to open a childcare account under section 17 of the Childcare Payments Act 2014 or enable the employee's partner to do so.

8

In subsection (7) “partner” is to be read in accordance with regulations made under section 3(5) of that Act.

270BF156Meaning of “relevant earnings amount” and “required time”

1

For the purposes of section 270A, the “relevant earnings amount”, in the case of an employee provided with vouchers by an employer for any qualifying week in a tax year, means—

a

the aggregate of—

i

the amount of any relevant earnings for the tax year from employment by the employer, and

ii

any amounts treated under Chapters 2 to 12 of Part 3 as earnings from such employment, less

b

the aggregate of any excluded amounts.

2

Chapter 7Exemptions: removal benefits and expenses

Exemption of removal benefits and expenses: general

271Limited exemption of removal benefits and expenses: general

1

No liability to income tax in respect of earnings F147or by virtue of Part 7A arises by virtue of—

a

the provision of removal benefits to which this section applies, or

b

the payment or reimbursement of removal expenses to which this section applies.

2

F146In relation to earnings, subsection (1) does not apply if (disregarding this section) the earnings are general earnings to which either of the following sections applies—

a

section 22 (chargeable overseas earnings for year when F79remittance basis applies and employee F184outside section 26 ), or

b

section 26 (foreign earnings for year when F80remittance basis applies and employee F185meets section 26A requirement ).

F1452A

In relation to Part 7A, subsection (1) does not apply to any amount so far as the amount (disregarding this section and section 554P) would count as employment income to which section 554Z9 or 554Z10 would apply.

3

Subsection (1) is subject to section 287 (limit on exemption).

they are reasonably incurred by the employee in connection with a change of the employee’s residence which meets the conditions in section 273,

b

they are incurred on or before the limitation day, and

c

they are within one of the provisions referred to in subsection (1)(c)(i) to (vi) or within section 284 (bridging loan expenses).

273Conditions applicable to change of residence

1

The conditions referred to in section 272(1)(a) and (3)(a) which apply to the change of the employee’s residence are conditions A to C.

2

Condition A is that the change of residence results from one of the following changes—

a

the employee becoming employed,

b

an alteration of the duties of the employment, or

c

an alteration of the place where the employee is normally to perform those duties.

3

Condition B is that the change of residence is made wholly or mainly to allow the employee to reside within a reasonable daily travelling distance of the place where the employee normally performs or is normally to perform the duties of the employment after the employment change (see section 275).

4

Condition C is that the employee’s former residence is not within a reasonable daily travelling distance of that place.

274Meaning of “the limitation day”

1

In this Chapter “the limitation day”, in relation to an employee’s change of residence, means the last day of the tax year after that in which the employee begins to perform the duties of the employment after the employment change, but this is subject to any direction under subsection (2).

2

F42An officer of Revenue and Customs may direct that the last day of a later tax year is the limitation day in relation to any particular change of residence if it appears to them reasonable to do so having regard to all the circumstances of that change.

275Meaning of “the employment change”

In this Chapter “the employment change”, in relation to an employee’s change of residence, means whichever of the changes specified in section 273(2) results in the change of residence.

276Meaning of “residence”, “former residence” and “new residence” etc.

5

In this section—

“appropriate registry” means—
1. a
  Her Majesty’s Land Registry,
2. b
  the Land Registry in Northern Ireland, or
3. c
  the Registry of Deeds for Northern Ireland, and
“appropriate register” means any register under the management and control of the Keeper of the Registers of Scotland.

278Abortive acquisition benefits and expenses

Benefits or expenses are within this section if—

a

they are benefits provided or expenses incurred with a view to the acquisition of an interest in a residence,

b

the interest is not acquired—

i

because of circumstances outside the control of the person seeking to acquire it, or

ii

because that person reasonably declines to proceed, and

c

the benefits or expenses would have fallen within section 277 if the interest had been acquired.

part of it was so raised and the rest of it is so secured.

280Transporting belongings

1

The following benefits are within this section—

a

If an amount is so deductible in respect of part only of the cost of a benefit, the part of the benefit excluded by this section is to be determined on a just and reasonable basis.

283Exclusion from section 281 of taxable car and van facilities

1

A car or van is not treated as a facility for the purposes of section 281(1) if in the tax year in which it is provided it is also made available—

a

to the employee or members of the employee’s family or household for private use not falling within section 281(1),

b

by reason of the employee’s employment, and

c

without any transfer of the property in it.

2

The following sections apply for the purposes of this section as they apply for the purposes of Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits)—

for redeeming a loan—

i

which was raised by the employee to obtain an interest in the former residence,

ii

which is secured on such an interest, or

iii

which was partly so raised and the rest of which is so secured.

3

If the loan exceeds the market value of the employee’s interest in the former residence at the time of acquisition of the new residence, the interest on the excess is not within this section.

4

If subsection (3) applies in a case where the loan is used partly for purposes within subsection (2) and partly for other purposes, the amount of the interest within this section is the appropriate fraction of the total interest.

5

The appropriate fraction is—

\frac{MV}{L}

or, if it is smaller—

\frac{PL}{L}

where—

MV is the market value of the employee’s interest in the former residence at the time of acquisition of the new residence,

PL is the part of the loan used for purposes within subsection (2), and

L is the amount of the loan.

6

In this section—

a

references to a loan raised by the employee include a loan raised by—

i

one or more members of the employee’s family or household, or

ii

the employee and one or more members of the employee’s family or household, and

b

references to the employee having, disposing of or acquiring an interest in a residence include—

i

one or more members of the employee’s family or household having, disposing of or acquiring such an interest, or

ii

the employee and one or more members of the employee’s family or household having, disposing of or acquiring such an interest.

285Replacement of domestic goods

1

Benefits and expenses are within this section if—

a

the employee has an interest in the former residence and disposes of it because of the change of residence,

b

the employee acquires an interest in the new residence,

c

in the case of benefits, they are domestic goods provided to replace goods used at the former residence which are unsuitable for use at the new residence, and

d

in the case of expenses, they are incurred on the purchase of domestic goods intended for such replacement.

2

In this section references to the employee having, disposing of or acquiring an interest in a residence include—

a

one or more members of the employee’s family or household having, disposing of or acquiring such an interest, or

b

the employee and one or more members of the employee’s family or household having, disposing of or acquiring such an interest.

286Power to amend sections F11277 to 285

1

The Treasury may by regulations amend sections F11277 to 285 so as to secure that benefits or expenses which would not otherwise fall within any of those sections do so.

2

The regulations may include such supplementary, incidental or consequential provisions as appear to the Treasury to be necessary or expedient.

3

Those provisions may be made by amending this Chapter or otherwise.

4

The regulations apply to a change of an employee’s residence resulting from an employment change occurring on or after the day specified in the regulations for this purpose.

Limit on exemption

287Limit on exemption

1

If in the case of any change of residence the value of the exemption exceeds £8,000, section 271 (exemption of removal benefits and expenses) does not apply to the excess.

2

The value of the exemption is an amount equal to the sum of—

a

the section 62 earnings, F149...

b

the benefits code earnings (after taking account of section 64(2)(b) where otherwise an amount that falls within paragraph (a) would be included)F150, and

c

the Part 7A employment income

3

In this section “the section 62 earnings” means all earnings within section 62 (earnings) in respect of which section 271 would prevent liability to income tax from arising if this section were disregarded.

4

In this section “the benefits code earnings” means all earnings—

a

which are treated as such under the benefits code (except earnings so treated under Chapter 7 of Part 3 (taxable benefits: loans)), and

b

in respect of which section 271 would prevent liability to income tax from arising if this section were disregarded.

5

In the case of living accommodation, the amount that would be so treated is to be taken to be equal to—

CE - D

where—

CE is the cash equivalent of the accommodation under Chapter 5 of Part 3 (taxable benefits: living accommodation) for the period in which the accommodation is provided (calculated as mentioned in section 103), and

the amount referred to in section 287(2) (the value of the exemption);

and for those purposes that excess is “the unused exemption”.

4

In this section and section 289 “the exempted loan discharge period”, in relation to a loan, means the period of N days beginning with the day on which it is made, taking N as the number obtained by applying the following formula and, if that does not give a whole number, rounding up the result to the nearest whole number—

\frac{A}{B \times C} \times 365

where—

A is the unused exemption,

B is the maximum amount of the loan outstanding in the period beginning with the time when the loan is made and ending with the limitation day, and

C is the official rate of interest in force when the loan is made (expressed as a percentage).

5

In this section—

a

references to a loan raised by the employee include a loan raised by—

i

one or more members of the employee’s family or household, or

ii

the employee and one or more members of the employee’s family or household, and

b

references to the employee having, disposing of or acquiring an interest in a residence include—

i

one or more members of the employee’s family or household having, disposing of or acquiring such an interest, or

ii

the employee and one or more members of the employee’s family or household having, disposing of or acquiring such an interest.

6

The tax payable in respect of a loan for a tax year ending before the limitation day may be decided on the basis that the unused removal benefit exemption condition will not be met.

289Relief for certain bridging loans not qualifying for exemption under section 288

1

This subsection applies to a loan if—

a

it is a removal benefit (see section 288(2)),

b

the unused removal benefit exemption condition is met (see section 288(3)), and

c

the loan is not discharged before the end of the exempted loan discharge period (see section 288(4)).

2

A loan to which subsection (1) applies is to be treated for the purposes of Chapter 7 of Part 3 (taxable benefits: loans) as if it was made on the day after the last day of the exempted loan discharge period.

3

Subsection (2) does not apply for the purposes of sections 176, 177, 180, 189 and 190.

4

The tax payable in respect of a loan for a tax year ending before the limitation day may be decided on the basis that subsections (1) and (2) will not apply because the unused removal benefit exemption condition will not be met.

F200CHAPTER 7AExemptions: amounts which would otherwise be deductible

Annotations:

Amendments (Textual)

F200

Pt. 4 Ch. 7A inserted (with effect in accordance with s. 11(2) of the amending Act) by Finance Act 2015 (c. 11), s. 11(1)

1

A person (“the applicant”) may apply to Her Majesty's Revenue and Customs for approval to pay or reimburse expenses of the applicant's employees, or employees of another person, at a rate set out in the application (“the proposed rate”).

2

An officer of Revenue and Customs may give the approval if satisfied that any calculation of a payment or reimbursement of expenses in accordance with the proposed rate, or such other rate as is agreed between the applicant and the officer, would be a reasonable estimate of the amount of expenses actually incurred.

3

An approval under subsection (2) takes effect in accordance with a notice (an “approval notice”) given to the applicant by an officer of Revenue and Customs.

4

An approval notice must specify—

a

the rate at which expenses may be paid or reimbursed,

b

the day from which the approval takes effect, that day not being earlier than the day on which the approval notice is given,

c

the day on which the approval ceases to have effect, that day not being later than the end of the period of 5 years beginning with the day on which the approval takes effect, and

d

the type of expenses to which the approval relates.

5

An approval notice may specify that the approval is subject to conditions specified or described in the notice.

6

An application for an approval under this section must be in such form and manner, and contain such information, as is specified by Her Majesty's Revenue and Customs.

289CRevocation of approvals

This section applies if conditions A to C are met.

2

Condition A is that, pursuant to arrangements, an amount—

a

is paid or reimbursed to an employee in respect of expenses, or

b

is treated as earnings of an employee as a result of the provision of a benefit,

which, in the absence of this section, would have been exempt from income tax.

3

Condition B is that, in the absence of those arrangements, the employee would have received a greater amount of general earnings or specific employment income in respect of which—

a

tax would have been chargeable, or

b

national insurance contributions would have been payable (whether by the employee or another person).

4

Condition C is that the main purpose, or one of the main purposes, of the arrangements is the avoidance of tax or national insurance contributions.

5

If this section applies—

a

the exemption conferred by section 289A does not apply in respect of the amount paid or reimbursed as mentioned in subsection (2)(a), and

b

the exemption conferred by section 289D does not apply in respect of the amount treated as earnings as mentioned in subsection (2)(b).

6

In this section “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable.

Chapter 8Exemptions: special kinds of employees

Ministers of religion

290Accommodation benefits of ministers of religion

1

No liability to income tax in respect of a person employed as a full-time minister arises by virtue of—

a

the payment or reimbursement of a statutory amount payable in connection with qualifying premises, or

b

the reimbursement of a statutory deduction made in connection with qualifying premises.

2

No liability to income tax in respect of a person employed as a full-time minister arises by virtue of the payment or reimbursement of expenses incurred in connection with providing living accommodation in qualifying premises if the employment is F212lower-paid employment as a minister of religion (see section 290D).

3

Subsection (1) does not apply if or to the extent that the amount or deduction is properly attributable to a part of the premises for which the minister receives rent.

4

Premises are qualifying premises in relation to a person employed as a minister if—

a

an interest in them belongs to a charity or an ecclesiastical corporation, and

b

because of that interest and by reason of holding the employment, the minister has a residence in them from which to perform the duties of the employment.

5

In this section—

F165...
“full-time minister” means a person in full-time employment as a minister of a religious denomination,
“statutory amount” means an amount paid in pursuance of a provision in, or having the force of, an Act, and
“statutory deduction” means a deduction made in pursuance of such a provision.

290AF112Accommodation outgoings of F201lower-paid ministers of religion

1

No liability to income tax arises in respect of a person in lower-paid employment as a minister of F203religion by virtue of the payment or reimbursement of accommodation outgoings.

2

Subsection (1) does not apply if the minister is paid an allowance intended to be used, wholly or in part, for paying accommodation outgoings (as to which see section 290B).

3

In this section—

“accommodation outgoings” means amounts incurred by the minister in—
1. a
  heating, lighting or cleaning qualifying premises; or
2. b
  maintaining a garden forming part of qualifying premises;
F204...
“qualifying premises” has the same meaning as in section 290.

290BAllowances paid to F202lower-paid ministers of religion in respect of accommodation outgoings

1

This section applies where a person in lower-paid employment as a minister of F207religion is paid an allowance intended to be used, wholly or in part, for paying accommodation outgoings.

2

No liability to tax arises by virtue of the payment of the allowance to the extent that it is used for paying accommodation outgoings.

3

In this section—

“accommodation outgoings” F208has the same meaning as in section 290A;
“qualifying premises” has the same meaning as in section 290.

section 290G (employment in two or more related employments).

290DMeaning of “lower-paid employment as a minister of religion”

1

For the purposes of this Part an employment is “lower-paid employment as a minister of religion” in relation to a tax year if—

a

the employment is direct employment as a minister of a religious denomination, and

b

the earnings rate for the employment for the year (calculated under section 290E) is less than £8,500.

2

An employment is not “direct employment” for the purposes of subsection (1)(a) if—

a

it is an employment which is treated as existing under—

i

section 56(2) (deemed employment of worker by intermediary), or

ii

section 61G(2) (deemed employment of worker by managed service company), or

b

an amount counts as employment income in respect of it by virtue of section 554Z2(1) (treatment of relevant step under Part 7A (employment income provided through third parties)).

3

Subsection (1) is subject to section 290G.

290ECalculation of earnings rate for a tax year

1

For any tax year the earnings rate for an employment is to be calculated as follows—

Step 1 Find the total of the following amounts—
1. a
  the total amount of the earnings from the employment for the year within Chapter 1 of Part 3 (earnings),
2. b
  the total of any amounts that are treated as earnings from the employment for the year under the benefits code (see subsections (2) and (3)), and
3. c
  the total of any amounts that are treated as earnings from the employment for the year under Chapter 12 of Part 3 (other amounts treated as earnings),
excluding any exempt income, other than any attributable to section 290A or 290B (accommodation outgoings of ministers of religion).
Step 2 Add to that total any extra amount required to be added for the year by section 290F (extra amounts to be added in connection with a car).
Step 3 Subtract the total amount of any authorised deductions (see subsection (4)) from the result of step 2.
Step 4 The earnings rate for the employment for the year is given by the formula—
where—
R is the result of step 3,
Y is the number of days in the year, and
E is the number of days in the year when the employment is held.

2

Section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion) is to be disregarded for the purpose of determining any amount under step 1.

3

If the benefit of living accommodation is to be taken into account under step 1, the cash equivalent is to be calculated in accordance with section 105 (even if the cost of providing the accommodation exceeds £75,000).

4

For the purposes of step 3 “authorised deduction” means any deduction that would (assuming it was an amount of taxable earnings) be allowed from any amount within step 1 under—

section 346 (employee liabilities),
section 370 (travel costs and expenses where duties performed abroad: employee's travel),
section 371 (travel costs and expenses where duties performed abroad: visiting spouse's, civil partner's or child's travel),
section 373 (non-domiciled employee's travel costs and expenses where duties performed in UK),
section 374 (non-domiciled employee's spouse's, civil partner's or child's travel costs and expenses where duties performed in UK),
section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)),
section 713 (payroll giving to charities),
sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or
section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions).

290FExtra amounts to be added in connection with a car

1

The provisions of this section apply for the purposes of section 290E in the case of a tax year in which a car is made available as mentioned in section 114(1) (cars, vans and related benefits) by reason of the employment.

2

Subsection (3) applies if in the tax year—

a

an alternative to the benefit of the car is offered, and

b

the amount that would be earnings within Chapter 1 of Part 3 if the benefit of the car were to be determined by reference to the alternative offered exceeds the benefit code earnings (see subsection (4)).

3

The amount of the excess is an extra amount to be added under step 2 in section 290E(1).

4

For the purposes of subsection (2) “the benefit code earnings” is the total for the year of—

a

the cash equivalent of the benefit of the car (calculated in accordance with Chapter 6 of Part 3 (taxable benefits: cars, vans etc)), and

b

the cash equivalent (calculated in accordance with that Chapter) of the benefit of any fuel provided for the car by reason of the employment.

5

Section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion) is to be disregarded for the purpose of determining any amount under this section.

290GRelated employments

292F119Accommodation expenses of MPs

1

No liability to income tax arises in respect of a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 if the payment is—

a

expressed to be made in respect of accommodation expenses, or

b

related to or in consequence of a payment expressed to be so made.

2

“Accommodation expenses” means expenses necessarily incurred on overnight accommodation that is required for the performance of the member's parliamentary duties in or about the Palace of Westminster or the member's constituency.

3

But the cost of an overnight stay in a hotel that was required only because, on that night, the member had been required to be at the House of Commons because the House was sitting late does not count as accommodation expenses for the purposes of this section, unless the member had been required to be at the House because it was sitting beyond 1 a.m.

4

Subsection (1) does not apply to a loan for a deposit payable at the commencement of a tenancy.

F1545

The reference in subsection (1) to a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 includes a payment made under that section to another person at the direction of a member (see section 6(7) of that Act).

293Overnight expenses of other elected representatives

1

No liability to income tax arises in respect of a payment to which this section applies if it is expressed to be made in respect of a member’s necessary overnight expenses.

2

This section applies to payments—

a

made to members of the Scottish Parliament under section 81(2) of the Scotland Act 1998 (c. 46),

b

made to members of the National Assembly for Wales under F73section 20(2) of the Government of Wales Act 2006 or to a member of the Welsh Assembly Government under section 53(2) of that Act, or

c

made to members of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998 (c. 47).

3

In this section “a member’s necessary overnight expenses” means additional expenses necessarily incurred by a member for the purpose of performing duties as a member in staying overnight away from the member’s only or main residence—

a

in the area in which the Parliament or Assembly to which the member belongs sits, or

b

in the constituency or region which the member represents.

293AF120UK travel and subsistence expenses of MPs

1

No liability to income tax arises in respect of a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 if the payment is expressed to be made—

a

in respect of relevant UK travel expenses, or

b

in respect of relevant subsistence expenses.

2

“Relevant UK travel expenses” means expenses necessarily incurred on journeys of the following kinds within the United Kingdom—

a

journeys made by the member that are necessary for the performance of the member's parliamentary duties, and

b

if the member shares caring responsibilities with a spouse or partner, journeys made by the spouse or partner between the member's London Area residence and the member's constituency residence.

3

“Relevant subsistence expenses” means expenses necessarily incurred on an evening meal (excluding alcoholic drinks) eaten on the Parliamentary Estate, where the member is required to be at the House of Commons because the House is sitting beyond 7.30 p.m.

4

“Caring responsibilities” and “London Area” have the same meaning in subsection (2)(b) as they have in the scheme in effect for the time being under section 5 of the Parliamentary Standards Act 2009.

in any other case, it is between the member's local home and the principal local office.

6

In this section—

“constituency or region”, in relation to a member, means the constituency or region which the member represents and the area within 20 miles of the boundary of that constituency or region;
“local office”, in relation to a member, means an office which is situated in the constituency or region and occupied by the member for the purposes of performing duties as a member;
“the member's local home” means a residence of the member situated in the constituency or region;
“the member's parliamentary home” means the member's only or main residence in the area comprising—
1. a
  the main site of the Parliament or Assembly to which the member belongs, and
2. b
  the area within 20 miles of that site;
“principal local office”, in relation to a member, means the local office most frequently occupied by the member for the purposes of performing duties as a member.

7

A person has “caring responsibilities” if the person—

a

has parental responsibility for a dependent child aged under 17 or for a child aged 17 or 18 who is in full-time education, or

b

is the primary carer for a family member in receipt of—

i

attendance allowance,

ii

disability living allowance at the middle or highest rate for personal care,

iii

the daily living component of personal independence payment, or

iv

constant attendance allowance at or above the maximum rate with an industrial injuries disablement benefit, or the basic (full day) rate with a war disablement pension.

8

The Treasury may by order amend the definition of “caring responsibilities” in subsection (7).

F117294F12European travel expenses of MPs and other representatives

1

No liability to income tax arises in respect of a sum that is paid to—

a

a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009,

b

a member of the Scottish Parliament under section 81(2) of the Scotland Act 1998,

c

a member of the National Assembly for Wales under section 20(2) of the Government of Wales Act 2006 or a member of the Welsh Assembly Government under section 53(2) of that Act, or

d

a member of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998,

and expressed to be made in respect of European travel expenses.

F152

“European travel expenses” means the cost of, and any additional expenses incurred in, travelling between the United Kingdom and a relevant European location.

3

“Relevant European location” means—

a

a European Union institution or agency, or

b

the national parliament of—

i

another member State,

ii

a candidate or applicant country, or

iii

F118any other country that is a member of the Council of Europe.

4

The Treasury may by order amend subsection (3) by—

a

adding a European location,

b

removing a European location, or

c

varying the description of a European location.

Annotations:

Amendments (Textual)

F220

S. 295A and cross-heading inserted (with effect in accordance with s. 29(7) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 29(5)

b

provide for references in this section to a member of a relevant authority to be read as references to a member of a description prescribed in the regulations, and

c

define what is meant by “qualifying payment” for the purposes of this section.

5

The regulations may contain transitional provision and savings.

Armed forces

296Armed forces' leave travel facilities

1

No liability to income tax arises in respect of—

a

the provision of travel facilities for a member of the armed forces of the Crown going on or returning from leave, or

b

a payment made in respect of such travel.

2

In subsection (1) “travel facilities” does not include a vehicle.

297Armed forces' food, drink and mess allowances

1

No liability to income tax arises in respect of allowances if—

a

they are payable out of the public revenue to any description of members of the armed forces of the Crown, and

b

the Treasury certifies that they are payable to them instead of food or drink normally supplied to members of the armed forces.

2

No liability to income tax arises in respect of allowances if—

a

they are payable out of the public revenue in respect of any description of members of the armed forces of the Crown, and

b

the Treasury certifies that they are so payable as a contribution to the expenses of a mess.

297AF75Armed forces: the Operational Allowance

1

No liability to income tax arises in respect of payments to members of the armed forces of the Crown of the Operational Allowance.

2

The Operational Allowance is an allowance designated as such F171under a Royal Warrant made under section 333 of the Armed Forces Act 2006 .

297BF84Armed forces: the Council Tax Relief

1

No liability to income tax arises in respect of payments of the Council Tax Relief to members of the armed forces of the Crown.

2

Payments of the Council Tax Relief are payments designated as such F172under a Royal Warrant made under section 333 of the Armed Forces Act 2006 .

297CF174Armed forces: Continuity of Education Allowance

1

No liability to income tax arises in respect of payments of the Continuity of Education Allowance to or in respect of members of the armed forces of the Crown during their employment under the Crown or after their deaths.

2

The Continuity of Education Allowance is an allowance designated as such under a Royal Warrant made under section 333 of the Armed Forces Act 2006.

298Reserve and auxiliary forces' training allowances

No liability to income tax arises in respect of the following sums if they are payable out of the public revenue to members of the reserve and auxiliary forces of the Crown—

a

training expenses allowances, and

b

bounties payable in consideration of the members undertaking certain training and attaining a particular standard of efficiency.

Crown employees

299Crown employees' foreign service allowances

1

No liability to income tax arises in respect of an allowance paid to a person in employment under the Crown if it is certified to represent compensation for the extra cost of being obliged to live outside the United Kingdom in order to perform the duties of the employment.

2

A certificate under subsection (1) may only be given by—

a

the Treasury,

b

the Secretary of State,

c

the Lord Chancellor,

d

the Chancellor of the Exchequer,

e

the Minister for the Civil Service,

f

the Lord President of the Council,

g

the Lord Privy Seal, or

h

the Attorney General.

Consuls, foreign agents etc.

300Consuls

1

No liability to income tax arises in respect of income arising from the office of a consul in the United Kingdom in the service of a foreign state.

2

Such income is also to be disregarded in estimating the amount of income for any income tax purposes.

3

In this section “consul” means a person recognised by Her Majesty as being a consul-general, consul, vice-consul or consular agent.

301Official agents

1

No liability to income tax arises in respect of income arising from employment as an official agent in the United Kingdom for a foreign state if conditions A and B are met.

2

Condition A is that the employee is neither—

a

a Commonwealth citizen, nor

b

b

references in that Act to a country to which a provision of that Act applies were references to a designated country.

6

In this section—

“allied headquarters” means an international military headquarters established under the North Atlantic Treaty, F168...
“designated” means designated for the purpose in question by or under an Order in Council made for giving effect to an international agreementF169, and
“ the EU civilian staff ” means designated for the purpose in question by or under an Order in Council made for giving effect to an international agreement.
1. (a)
  civilian personnel seconded by a member State to an EU institution for the purposes of activities (including exercises) relating to the preparation for, and execution of, tasks mentioned in Article 43(1) of the Treaty on European Union (tasks relating to a common security and defence policy), as amended from time to time, and
2. (b)
  civilian personnel (other than locally hired personnel)—
  1. (i)
    made available to the EU by a member State to work with designated international military headquarters or a force of a designated country, or
  2. (ii)
    otherwise made available to the EU by a member State for the purposes of activities of the kind referred to in paragraph (a).

Detached national experts

304Experts seconded to European Commission

1

No liability to income tax arises in respect of daily subsistence allowances paid by the European Commission to persons whose services are made available to the Commission by their employers under the detached national experts scheme.

2

“The detached national experts scheme” means—

a

the scheme relating to national experts seconded to the European Commission which was established by the Commission on 26th July 1988, as it has effect for the time being, or

b

any scheme having effect for the time being which replaces that scheme.

304AF157Experts seconded to other European Union bodies

1

No liability to income tax arises in respect of any subsistence allowances paid by a relevant EU body to persons who, because of their expertise in matters relating to the subject matter of the functions of the relevant EU body, have been seconded to the body by their employers.

2

Each of the following is a “relevant EU body”—

a

the European Medicines Agency, established as the European Agency for the Evaluation of Medicinal Products by Council Regulation (EEC) No 2309/93 of 22 July 1993,

b

the European Police College, established by Council Decision of 20 September 2005 (2005/681/JHA),

c

the European Banking Authority, established by Regulation (EU) No 1093/2010 of 24 November 2010, and

d

any other body established by an EU instrument which is designated as a relevant EU body for the purposes of this section by an order made by the Treasury.

Offshore oil and gas workers

305Offshore oil and gas workers: mainland transfers

1

No liability to income tax arises in respect of—

a

the provision for an employee who has a permanent workplace at an offshore installation of—

i

transfer transport,

ii

related accommodation and subsistence, or

iii

local transport, or

b

the payment or reimbursement of reasonable expenses incurred by such an employee on such transport or accommodation and subsistence.

2

Subsection (1)(a)(ii) only applies if the related accommodation and subsistence is provided at reasonable cost.

3

In this section “transfer transport” means transport by sea or air between the mainland of Great Britain or Northern Ireland and the offshore installation, which meets conditions A and B.

4

Condition A is that the place of arrival or departure on the mainland is one to or from which transport between the mainland and the offshore installation is provided for employees generally.

5

Condition B is that the cost of the transport would not be deductible under Part 5 if the employee incurred and paid it.

6

In this section—

“related accommodation and subsistence” means overnight accommodation and subsistence in the vicinity of the place of departure or arrival on the mainland, which is necessary because of the time at which transfer transport is to be taken,
“local transport” means transport between a place where the employee is provided with related accommodation and subsistence and the place of departure or arrival on the mainland,
F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“workplace” and “permanent workplace” have the meaning given by section 339.

Miners etc.

306Miners etc: coal and allowances in lieu of coal

1

No liability to income tax arises in respect of the provision of coal or smokeless fuel or an allowance paid in lieu of such provision if the employee is a colliery worker and the condition in subsection (2) is met.

2

That condition is that the amount of coal or fuel provided or in respect of which the allowance is paid does not substantially exceed the amount reasonably required for personal use.

3

That condition is assumed to be met unless the contrary is shown.

4

In this section “colliery worker” means a coal miner or any other person employed at or about a colliery otherwise than in clerical, administrative or technical work.

F206Carers

Annotations:

Amendments (Textual)

F206

S. 306A and cross-heading inserted (with effect in accordance with s. 14(4) of the amending Act) by Finance Act 2015 (c. 11), s. 14(2)

306ACarers: board and lodging

1

For the purposes of this section an individual is employed as a home care worker if the duties of the employment consist wholly or mainly of the provision of personal care to another individual (“the recipient”) at the recipient's home, in a case where the recipient is in need of personal care because of—

a

old age,

b

mental or physical disability,

c

past or present dependence on alcohol or drugs,

d

past or present illness, or

e

past or present mental disorder.

2

No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of the provision of board or lodging (or both) to an individual employed as a home care worker if the provision is—

a

on a reasonable scale,

b

at the recipient's home, and

c

by reason of the individual's employment as a home care worker.

F222Professional sportspersons

Annotations:

Amendments (Textual)

F222

S. 306B and cross-heading inserted (with effect in accordance with Sch. 2 para. 4(1) of the amending Act) by Finance Act 2016 (c. 24), Sch. 2 para. 2

Section 993 of ITA 2007 (meaning of “connected” persons) has effect for the purposes of this section.

11

Terms used in this section and section 226E have the same meaning as in that section.

Chapter 9Exemptions: pension provision

C1 C2307Death or retirement benefit provision

1

No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of provision made by an employee’s employer F49under a registered pension scheme or otherwise for a retirement or death benefit.

F481A

Subsection (1) does not apply to provision made for insuring against the risk that a retirement or death benefit under an employer-financed retirement benefits scheme cannot be paid or given because of the employer’s insolvency.

1B

In subsection (1A) “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 (see section 393A).

2

In F50this section “retirement or death benefit” means a pension, annuity, lump sum, gratuity or other similar benefit which will be paid or given to the employee or a member of the employee’s family or household in the event of the employee’s retirement or death.

308F52Exemption of contributions to registered pension scheme

No liability to income tax arises in respect of earnings where an employee’s employer makes contributions under a registered pension scheme F182in respect of the employee.

C3308AF51Exemption of contributions to overseas pension scheme

1

No liability to income tax arises in respect of earnings where an employer makes contributions under a qualifying overseas pension scheme in respect of an employee who is a relevant migrant member of the pension scheme.

2

In subsection (1)—

“qualifying overseas pension scheme”, and
“relevant migrant member”,
have the same meaning as in Schedule 33 to FA 2004 (overseas pension schemes: migrant member relief).

308BF215Independent advice in respect of conversions and transfers of pension scheme benefits

1

No liability to income tax arises in respect of—

a

the provision to an employee or former employee of appropriate independent advice, or

b

the payment or reimbursement, to or in respect of an employee or former employee, of the cost of such advice,

if conditions A to C are met.

2

Condition A is that the provision, payment or reimbursement is required by regulations under section 49 or 52 of the Pension Schemes Act 2015 (power to require employer to arrange independent advice in respect of conversions and transfers).

3

If condition A is met only as respects part of the payment or reimbursement because the amount of the payment or reimbursement exceeds the amount required to be paid or reimbursed, subsection (1) applies in respect of that part.

4

Condition B is that the provision, payment or reimbursement is not pursuant to relevant salary sacrifice arrangements.

5

Condition C is that such other requirements as may be specified in regulations made by the Treasury are satisfied in relation to the provision, payment or reimbursement.

6

In this section—

“appropriate independent advice”—
1. a
  in relation to England and Wales and Scotland, has the meaning given by regulations under section 48 of the Pension Schemes Act 2015;
2. b
  in relation to Northern Ireland, has the meaning given by regulations under section 51 of that Act;
“relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which an employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of appropriate independent advice or the payment or reimbursement of the cost of such advice.

308CF244Provision of pensions advice: limited exemption

1

No liability to income tax arises in respect of—

a

the provision of relevant pensions advice to an employee or former or prospective employee, or

b

b

in any other case, the employee's normal minimum pension age, as defined by section 279(1) of FA 2004.

10

The “ill-health condition” is met by an employee if the employer is satisfied, on the basis of evidence provided by a registered medical practitioner, that the employee is (and will continue to be) incapable of carrying on his or her occupation because of physical or mental impairment.

Chapter 10Exemptions: termination of employment

Redundancy payments

309Limited exemptions for statutory redundancy payments

1

No liability to income tax in respect of earnings arises by virtue of a redundancy payment or an approved contractual payment, except where subsection (2) applies.

2

Where an approved contractual payment exceeds the amount which would have been due if a redundancy payment had been payable, the excess is liable to income tax.

3

No liability to income tax in respect of employment income other than earnings arises by virtue of a redundancy payment or an approved contractual payment, except where it does so by virtue of Chapter 3 of Part 6 (payments and benefits on termination of employment etc.).

4

For the purposes of this section—

a

a statutory payment in respect of a redundancy payment is to be treated as paid on account of the redundancy payment, and

b

a statutory payment in respect of an approved contractual payment is to be treated as paid on account of the approved contractual payment.

5

In this section—

“approved contractual payment” means a payment to a person on the termination of the person’s employment under an agreement in respect of which an order is in force under section 157 of ERA 1996 or Article 192 of ER(NI)O 1996,
“redundancy payment” means a redundancy payment under Part 11 of ERA 1996 or Part 12 of ER(NI)O 1996, and
“statutory payment” means a payment under section 167(1) of ERA 1996 or Article 202(1) of ER(NI)O 1996.

6

In subsection (5) “employment”, in relation to a person, has the meaning given in section 230(5) of ERA 1996 or Article 3(5) of ER(NI)O 1996.

Outplacement benefits

310Counselling and other outplacement services

1

No liability to income tax arises in respect of—

a

the provision of services to a person in connection with the cessation of the person’s employment, or

b

the payment or reimbursement of—

i

fees for such provision, or

ii

8

In this section “mileage allowance payments” has the meaning given by section 229(2).

that attendance at the course is one of the duties of the employee’s employment,

b

that the employee incurs and pays the expenses, and

c

if the employee has in fact ceased to be employed by the employer, that the employee continues to be employed by the employer.

7

In this section “mileage allowance payments” has the meaning given by section 229(2).

312Recovery of tax

1

This section applies if—

a

a person’s liability to tax for a tax year has been determined on the assumption that section 311(1) applies, and

b

subsequently—

i

the condition in section 311(4)(a) is not met because of the person’s failure to begin the course within the period of one year after ceasing to be employed, or

ii

the condition in section 311(4)(b) is not met because of the person’s continued employment or re-employment.

2

An assessment of an amount or further amount of tax due as a result of the condition not being met may be made under section 29(1) of TMA 1970.

3

Such an assessment must be made before the end of the period of 6 years immediately following the end of the tax year in which subsection (1) first applies.

4

If subsection (1)(b)(i) or (ii) applies, the person’s employer or former employer must give F42an officer of Revenue and Customs a notice containing particulars of the person’s failure to begin the course or continued employment or re-employment within 60 days of coming to know of it.

5

If F42an officer of Revenue and CustomsF41has reason to believe that a person has failed to give such a notice, F40the officer may by notice require the person to provide such information as F40the officer may reasonably require for the purposes of this section about—

a

the failure to begin the course,

b

the continued employment, or

c

the re-employment.

6

A notice under subsection (5) may specify a time (not less than 60 days) within which the required information must be provided.

F192CHAPTER 10AExemptions: bonus payments by certain employers

Annotations:

Amendments (Textual)

F192

Pt. 4 Ch. 10A inserted (with effect in accordance with Sch. 37 para. 8 of the amending Act) by Finance Act 2014 (c. 26), Sch. 37 para. 5

312ALimited exemption for qualifying bonus payments

1

This section applies in relation to qualifying bonus payments made, in a tax year (“the tax year”), by an employer which is a company to an employee or former employee of the employer.

2

No liability to income tax arises in respect of the qualifying bonus payments if, or to the extent that, the total chargeable amount in respect of those payments does not exceed £3,600 (“the exempt amount”).

3

If qualifying bonus payments are made to the same person by two or more employers in the tax year, subsection (2) applies separately in relation to the total payments made by each employer, unless subsection (4) applies.

4

If two or more employers are members of the same group at the time each of them first makes a qualifying bonus payment to the employee or former employee in the tax year, subsection (2) applies as if the reference to the qualifying bonus payments were to all the qualifying bonus payments made by those employers to the employee or former employee in that tax year.

5

If, in a tax year—

a

an employer makes a payment when it is a member of a group, and

b

later in that tax year the employer ceases to be a member of that group,

the employer is treated for the purposes of this section as remaining a member of that group for the remainder of the tax year (without prejudice to it also being a member of any other group).

6

In applying subsection (2)—

a

the exempt amount is set against payments in the order in which they are made, and

b

if two or more payments are made on the same day, which together take the total payments made in the tax year over the exempt amount, subsection (7) applies to determine the amount of each of those payments which is exempt.

7

In a case within subsection (6)(b), the amount of a payment which is exempt is given by the formula—

where—

P is the amount of the payment,

SP is the sum of that payment and the other payments made on the same day, and

REA is so much of the exempt amount as remains after taking account of any qualifying bonus payments previously made in the tax year.

8

Where subsection (2) applies separately to different payments by virtue of subsection (3), subsections (6) and (7) also apply to those payments separately.

9

The Treasury may by order increase or reduce the sum of money specified in subsection (2).

10

A statutory instrument containing an order under this section which reduces the sum of money specified may not be made unless a draft of it has been laid before and approved by a resolution of the House of Commons.

11

In this section “chargeable amount”, in respect of a qualifying bonus payment, means the amount of employment income which would be charged to tax in respect of that qualifying bonus payment, apart from this section.

if the qualifying period is 12 months, the number of days in that period reduced by 90, and

b

if the qualifying period is a shorter period by virtue of subsection (3), the number of days in that period reduced by the corresponding fraction of 90 days.

312CSection 312B: the participation and equality requirements

1

For the purposes of section 312B—

a

the participation requirement is that all persons in relevant employment when the award is determined must be eligible to participate in that and any other award under the scheme, and

b

the equality requirement is that every employee who participates in an award under the scheme must do so on the same terms.

2

A person is in “relevant employment” if—

a

where E is a member of a group, the person is employed by any company which is a member of the group, and

b

in any other case, the person is employed by E.

3

The participation requirement is not infringed by reason of a person in relevant employment being excluded from participating in an award because, at the time the award is determined, the person has less than the minimum period of continuous service in relevant employment required by E.

But the minimum period required by E for this purpose must not exceed 12 months.

4

The participation requirement is not infringed—

a

by reason of a person being excluded from participating in an award where—

i

disciplinary proceedings have been taken against the person by E which have resulted in a finding of gross misconduct against the person, and

ii

that finding was made in the period of 12 months immediately before the time the award is determined,

b

by reason of a person's eligibility to participate in an award being conditional, in a case where the person is at the time of the award subject to disciplinary proceedings taken by E, upon those proceedings being concluded and no finding of gross misconduct being made against that person, or

c

by a person being treated as never having been eligible to participate in an award where, after the award was made but before the payment is made—

i

a finding of gross misconduct is made against that person in disciplinary proceedings taken by E after the award was made, or

ii

that person is summarily dismissed from the employment.

5

The equality requirement is infringed if the amount of an award to an employee under the scheme is determined by reference to factors other than those mentioned in subsection (6).

6

The equality requirement is not infringed by reason of the amount of an award under the scheme to employees participating in the award being determined by reference to—

a

an employee's remuneration,

b

an employee's length of service, or

c

hours worked by an employee;

but this is subject to subsections (7) and (8).

7

The equality requirement is infringed if an award is made on terms such that some (but not all) of the employees participating in the award receive nothing.

8

If the amount of an award is determined by reference to more than one of the factors mentioned in subsection (6), the equality requirement is infringed unless—

a

each factor gives rise to a separate entitlement related to the level of remuneration, length of service or (as the case may be) hours worked, and

b

the total entitlement is the sum of those separate entitlements.

9

Subject to subsection (6), the equality requirement is infringed if any feature of the scheme has, or is likely to have, the effect of conferring benefits wholly or mainly on those participating in the award who are—

a

directors or former directors, or

b

employees receiving the higher or highest levels of remuneration, or

c

employees who—

i

are employed in a particular part of the business carried on by E or, if E is a member of a group, the group, or

ii

carry on particular kinds of activities.

10

In subsections (1)(b), (5), (6), (7) and (9) references to an employee include a former employee, so, when applying those subsections in relation to a former employee, any reference to remuneration, length of service, hours worked, being employed in a particular part of a business or carrying on particular activities is to be read as relating to that former employment.

312DSection 312B: the trading requirement

1

For the purposes of section 312B, a company meets the trading requirement if—

a

it is a trading company which is not a member of a group, or

b

it is a member of a trading group.

2

“Trading company” means a company carrying on trading activities whose activities do not include to a substantial extent activities other than trading activities.

3

“Trading group” means a group—

a

one or more of whose members carry on trading group activities, and

b

the activities of whose members, taken together, do not include to a substantial extent activities other than trading group activities.

4

In this section—

“trading activities” means activities carried on by the company in the course of, or for the purposes of, a trade being carried on by it;
“trading group activities” means activities carried on by a member of the group in the course of, or for the purposes of, a trade being carried on by any member of the group.

5

For the purposes of determining whether a company is a trading company or a member of a trading group—

a

the activities of the members of a group are to be treated as one business (with the result that activities are disregarded to the extent that they are intra-group activities), and

b

a business carried on by a company in partnership with one or more other persons is to be treated as not being a trading activity.

1

For the purposes of section 312B, a company meets the officer-holder requirement if the appropriate fraction does not exceed 2/5.

2

“The appropriate fraction” means—

where—

ND is the number of persons who are one or both of the following—

a
a director or other office-holder of the company;
b
an employee of the company connected with a person within paragraph (a);

NE is the number of persons who are employees (or office-holders) of the company.

section 286 of TCGA 1992 (connected persons: interpretation).

312HExcluded payments

1

For the purposes of section 312B, a payment is “excluded” if the employee is a party to arrangements (whether made before or after the beginning of the employee's employment) under which—

a

the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the payment, or

b

the employee and employer agree that the employee is to receive the payment rather than receive some other description of employment income.

2

In this section references to an employee include a former employee.

312IInterpretation of Chapter 10A

1

In this Chapter—

“company” has the meaning given by section 170(9) of TCGA 1992;
“trade” means any trade which is conducted on a commercial basis and with a view to the realisation of profits.

2

In this Chapter—

a

references to a group, to membership of a group, to the principal company of a group or to being members of the same group, are to be construed in accordance with section 170 of TCGA 1992, and

b

references to a group are to be construed with any necessary modifications where applied to a company incorporated under the law of a country or territory outside the United Kingdom.

3

For the purposes of this Chapter, a payment is treated as made when it would be treated as received for the purposes of Chapter 4 of Part 2 if it were not a qualifying bonus payment (see section 18).

4

In this Chapter references to a payment to an employee or former employee include a payment to the personal representatives of an employee or former employee who has died if the payment is made within the period of 12 months beginning with the date of death.

Chapter 11Miscellaneous exemptions

Living accommodation

313Repairs and alterations to living accommodation

1

This section applies where living accommodation is provided by reason of a person’s employment.

2

No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of—

a

alterations and additions to the premises which are of a structural nature, or

b

landlord’s repairs to the premises.

3

In this section “landlord’s repairs” means repairs of a kind which are the obligation of the lessor under the covenants implied by section 11(1) of the Landlord and Tenant Act 1985 (c. 70) (lessor’s repairing obligations in short leases) where premises are let under a lease to which that section applies.

314Council tax etc. paid for certain living accommodation

1

This section applies if living accommodation provided for an employee falls within the exception in one of the following provisions—

section 99(1) (accommodation necessary for proper performance of duties),
section 99(2) (accommodation provided for better performance of duties), or
section 100 (accommodation provided as a result of security threat).

2

No liability to income tax arises by virtue of—

a

any payment to, for or on behalf of the employee, or

b

any reimbursement of any payment by the employee,

in respect of council tax or rates, or water or sewerage charges, in respect of the accommodation.

315Limited exemption for expenses connected with certain living accommodation

1

This section applies if—

a

living accommodation is provided for an employee in a tax year, and

b

conditions A and B are met.

2

Condition A is that the accommodation falls within the exception in one of the following provisions—

section 99(1) (accommodation necessary for proper performance of duties),
section 99(2) (accommodation provided for better performance of duties), or
section 100 (accommodation provided as a result of security threat).

3

Condition B is that there is an amount of earnings from the employment in the tax year by virtue of expenditure, or the reimbursement to the employee of expenditure, on—

a

heating, lighting or cleaning the premises,

b

repairs to the premises, their maintenance or decoration, or

c

the provision in the premises of furniture, equipment or other items which are normal for domestic occupation.

4

If this section applies, no liability to income tax arises in respect of the earnings mentioned in subsection (3) to the extent that they exceed—

(10 % \times NE \times \frac{DA}{DE}) - SMG

where—

DA is the number of reckonable days in the tax year (a “reckonable day” being a day on which—

(a) the accommodation is provided, and
(b) the employment is held by the employee),

DE is—

(a) the number of days in that year, or
(b) if the employment is held for only part of that year, the number of days in that part,

NE is the net amount of the earnings from the employment in the tax year (see subsection (5)),

SMG is, where the expenses are incurred by a person other than the employee, so much of any sum made good by the employee to that other person as is properly attributable to the expenses.

5

To calculate the net amount of the earnings from the employment—

Step 1

Take the earnings from the employment, leaving out of account the expenses in question.

Step 2

Add, in the case of employment by a company, the earnings from any employment by an associated company.

A company is “associated” with another for this purpose if one has control of the other or both are under the control of the same person.

Step 3

1

This section applies where an employer makes a payment to an employee in respect of reasonable additional household expenses which the employee incurs in carrying out duties of the employment at home under homeworking arrangements.

2

No liability to income tax arises in respect of the payment.

3

In this section, in relation to an employee—

“homeworking arrangements” means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home; and
“household expenses” means expenses connected with the day to day running of the employee’s home.

Workplace meals

317Subsidised meals

F171

No liability to income tax arises in respect of the provision for an employee by the employer of free or subsidised meals if they are provided—

a

in a canteen, or

b

“relevant salary sacrifice arrangements” 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 free or subsidised meals;
“relevant flexible remuneration arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee and employer agree that the employee is to be provided with free or subsidised meals rather than receive some other description of employment income.

6

In this section “meals” includes light refreshments.

Childcare

F18318Childcare: exemption for employer-provided care

1

F38No liability to income tax arises in respect of the provision for an employee of care for a child if conditions A to D are met.

For the meaning of “care” and “child”, see section 318B.

2

If those conditions are met only as respects part of the provision, no such liability arises in respect of that part.

3

Condition A is that the child—

a

is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense,

b

is resident with the employee, or

c

In this section “scheme employer” means the employer operating the scheme under which the care is provided (who need not be the employer of the employee).

7

The partnership requirements are—

a

liability to income tax by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) arises only in respect of so much of the F242amount treated as earnings in respect of the benefit by virtue of section 203(1) or 203A(1) (as the case may be) as exceeds the exempt amount.

For F229the meaning of “eligible employee”, see section 318AZA, and for the meaning of “care” and “child”, see section 318B.

2

If those conditions are met only as respects part of the provision, subsection (1) applies in respect of that part.

3

Condition A is that the child—

a

is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense, or

b

is resident with the employee and is a person in respect of whom the employee has parental responsibility.

For the meaning of “parental responsibility”, see section 318B.

4

Condition B is that the care is qualifying child care.

For the meaning of “qualifying child care”, see section 318C.

5

Condition C is that the care is provided under a scheme that is open—

a

to the employer’s F230eligible employees generally, or

b

generally to those at a particular location.

F1325A

Where the scheme under which the care is provided involves—

a

relevant salary sacrifice arrangements, or

b

relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

5B

In subsection (5A)—

“relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the care is provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the care;
“relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the care is provided agree with the employer that they are to be provided with the care rather than receive some other description of employment income;
“relevant low-paid employees” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.

F1335C

Condition D is that the employer has, at the required time, made an estimate of the employee's relevant earnings amount for the tax year in respect of which the care is provided (see section 318AA).

6

For the purposes of this section the “exempt amount”, in any tax year, is F136the appropriate amount for each qualifying week in that year.

F1346A

In subsection (6) “the appropriate amount”, in the case of an employee, means—

a

if the relevant earnings amount in the case of the employee for the tax year, as estimated in accordance with subsection (5C), exceeds the higher rate limit for the tax year, F176£25 ,

b

c

otherwise, £55.

7

A “qualifying week” means a tax week in which care is provided for a child in circumstances in which conditions A to C are met.

8

An employee is only entitled to one exempt amount even if care is provided for more than one child.

But it does not matter that another person may also be entitled to an exempt amount in respect of the same child.

9

An employee is not entitled to an exempt amount under this section and under section 270A (limited exemption for childcare vouchers) in respect of the same tax week.

318AZAF232Meaning of “eligible employee”

1

An employee is an eligible employee for the purposes of section 318A if conditions A to C are met in relation to the employee.

2

Condition A is that the employee—

a

was employed by the employer immediately before the relevant day, and

b

has not ceased to be employed by the employer on or after that day.

3

“The relevant day” means the day specified by the Treasury in regulations for the purposes of this section.

4

Condition B is that there has not been a period of 52 tax weeks ending on or after the relevant day which has not included at least one qualifying week.

5

In subsection (4)—

“qualifying week” means a tax week in which care for a child has been provided for the employee under the scheme by the employer in circumstances in which conditions A to D in section 318A are met, and
“tax week” has the meaning given by section 318A(7).

6

Condition C is that the employee has not given the employer a childcare account notice.

7

8

In subsection (7) “partner” is to be read in accordance with regulations made under section 3(5) of that Act.

9

For the meaning of “care” and “child”, see section 318B.

318AAF159Meaning of “relevant earnings amount” and “required time”

1

For the purposes of section 318A, “relevant earnings amount”, in the case of an employee provided with care by an employer for any qualifying week in a tax year, means—

a

the aggregate of—

i

the amount of any relevant earnings for the tax year from employment by the employer, and

ii

any amounts treated under Chapters 2 to 12 of Part 3 as earnings from such employment, less

b

the aggregate of any excluded amounts.

2

where RD is the number of days in the period beginning with the day on which the employee becomes employed by the employer and ending with the tax year.

3

In subsection (1)—

“relevant earnings” has the same meaning as in subsection (1)(a) of section 270B (see subsection (3) of that section), and
“excluded amounts” has the same meaning as in subsection (1)(b) of section 270B (see subsection (4) of that section).

4

In section 318A “the required time”, in the case of an employee, means—

a

if the employee joins the scheme under which the care is provided at a time during the tax year, that time, and

b

otherwise, the beginning of the tax year.

5

For the purposes of subsection (5)(a) the employee is taken to join the scheme as soon as—

a

the employer has agreed that care will be provided under the scheme for the employee, and

b

there is a child falling within section 318A(3)(a) or (b) in relation to the employee.

6

The Treasury may by order amend this section.

318BF18Childcare: meaning of “care”, “child” and “parental responsibility”

1

For the purposes of sections F224318 to 318AZA (exemptions for employer-provided or employer-contracted childcare) “care” means any form of care or supervised activity that is not provided in the course of the child’s compulsory education.

2

For the purposes of those sections a person is a “child” until the last day of the week in which falls the 1st September following the child’s fifteenth birthday (or sixteenth birthday if the child is disabled).

3

For the purposes of subsection (2) a child is disabled if—

a

a disability living allowance F183or personal independence payment is payable in respect of him, or has ceased to be payable solely because he is a patient,

F213b

he is certified as severely sight impaired or blind by a consultant ophthalmologist, or

c

he ceased to be F214certified as severely sight impaired or blind by a consultant ophthalmologist within the previous 28 weeks.

4

In subsection (3)(a) “patient” means a person (other than a person who is serving a sentence imposed by a court in a prison or youth custody institution or, in Scotland, a young offenders' institution) who is regarded as receiving free in-patient treatment within the meaning of the Social Security (Hospital In-Patients) Regulations 1975 or the Social Security (Hospital In-Patients) Regulations (Northern Ireland) 1975.

5

For the purposes of sections 318 and 318A “parental responsibility” means all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and the child’s property.

6

In this section and section 318C “local authority” means—

a

in relation to England, the council of a county or district, a metropolitan district, a London Borough, the Common Council of the City of London or the Council of the Isles of Scilly;

b

in relation to Wales, the council of a county or county borough;

c

in relation to Scotland, a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994.

318CF18Childcare: meaning of “qualifying child care”

1

For the purposes of section 318A “qualifying child care” means registered or approved care within any of subsections (2) to (6) below that is not excluded by subsection (7) below.

2

Care provided for a child in England is registered or approved care if it is provided—

F95a

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F90b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F86ba

by a person registered under Part 3 of the Childcare Act 2006,

F88c

by or under the direction of the proprietor of a school on the school premises (subject to subsection (2B)),F98or

F76d

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F22e

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F64...

F93ea

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F89eb

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f

by a domiciliary care worker under the Domiciliary Care Agencies Regulations 2002, and

F94g

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F852A

In subsection (2)(c)—

“proprietor”, in relation to a school, means—
1. a
  the governing body incorporated under section 19 of the Education Act 2002, or
2. b
  if there is no such body, the person or body of persons responsible for the management of the school;
“school” means a school that Her Majesty’s Chief Inspector of Education, Children’s Services and Skills (the “Chief Inspector”) is or may be required to inspect;
“school premises” means premises that may be inspected as part of an inspection of the school by the Chief Inspector.

ii

the provider usually provides care there solely in respect of one or more children to whom the provider is a relativeF96, or

d

if it is provided by a foster parentF111, F126... in respect of a child whom that person is fostering F126... .

8

In subsection (7)—

“partner” means one of a F45couple (within the meaning given by section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A 1992); and
“relative” means parent, grandparent, aunt, uncle, brother or sister, whether by blood, half blood or marriage F46or civil partnership.

F219

In subsection (7)(c), “relative in relation to a child, also includes—

a

a local authority foster parent in relation to the child,

b

a foster parent with whom the child has been placed by a voluntary organisation,

c

a person who fosters the child privately (within the meaning of section 66 of the Children Act 1989, or

d

a step-parent of the child..

F10710

In this section “foster parent” in relation to a child—

a

in relation to England, means a person with whom the child is placed under the Fostering Services Regulations 2002;

b

in relation to Wales, means a person with whom the child is placed under the Fostering Services (Wales) Regulations 2003; and

c

in relation to Northern Ireland, means a person with whom the child is placed under the Foster Placement (Children) Regulations (Northern Ireland) 1996.

F12711

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

318DF18Childcare: power to vary F155amounts which are the exempt amount and qualifying conditions

1

The Treasury may by order amend section F151318A(6A) (employer-contracted care: the F152amounts which are the exempt amount) so as to substitute different sums of money for those for the time being specified.

2

The Treasury may by regulations make such amendments of the provisions of sections 318 to 318C relating to the qualifying conditions for the exemptions conferred by sections 318 and 318A as appear to them appropriate having regard to the corresponding provisions of regulations under section 12 of the Tax Credits Act 2002 relating to entitlement to the child care element of working tax credit F177or section 12 of the Welfare Reform Act 2012 F243or Article 17 of the Welfare Reform (Northern Ireland) Order 2015 relating to amounts in respect of childcare costs that may be included in the calculation of an award of universal credit .

Telephones and computer equipment

319F54Mobile telephones

1

No liability to income tax arises by virtue of section 62 (general definition of earnings) or Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of the provision of one mobile telephone for an employee without any transfer of property in it.

2

In this section “mobile telephone” means telephone apparatus which—

a

is not physically connected to a land-line, and

b

is not used only as a wireless extension to a telephone which is physically connected to a land-line,

or any thing which may be used in such apparatus for the purpose of gaining access to, or using, a public electronic communications service.

3

In this section the reference to the provision of a mobile telephone includes a reference to the provision, together with the mobile telephone provided, of access to, or the use of, a public electronic communications service by means of one mobile telephone number.

4

For the purposes of subsection (2) “telephone apparatus” means wireless telegraphy apparatus designed or adapted for the primary purpose of transmitting and receiving spoken messages and used in connection with a public electronic communications service.

F63320Limited exemption for computer equipment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F55Eye tests and special corrective appliances

Annotations:

Amendments (Textual)

F55

S. 320A and cross-heading inserted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 62(5) of the amending Act) by Finance Act 2006 (c. 25), s. 62(2)

320AEye tests and special corrective appliances

1

No liability to income tax arises in respect of the provision for an employee of—

a

an eye and eyesight test, or

b

special corrective appliances that an eye and eyesight test shows are necessary,

if conditions A and B are met.

2

Condition A is that the provision of the test or appliances is required by regulations made under the Health and Safety at Work etc. Act 1974.

3

Condition B is that tests and appliances of the kind mentioned in subsection (1) are made available generally to those employees of the employer in question for whom they are required to be provided by the regulations.

F105Health-screening and medical check-ups

Annotations:

Amendments (Textual)

F105

S. 320B and cross-heading inserted (with effect in accordance with s. 55(5) of the amending Act) by Finance Act 2009 (c. 10), s. 55(4)

320BHealth-screening and medical check-ups

1

No liability to income tax arises in respect of the provision for an employee, on behalf of an employer, of a health-screening assessment or a medical check-up.

2

Subsection (1) does not apply—

a

to more than one health-screening assessment provided in a tax year by any one employer or by any of a number of persons who are employers of the employee at the same time, or

b

to more than one medical check-up so provided.

3

In this section—

“health-screening assessment” means an assessment to identify employees who might be at particular risk of ill-health, and
“medical check-up” means a physical examination of the employee by a health professional for (and only for) determining the employee's state of health.

F195Recommended medical treatment

Annotations:

Amendments (Textual)

F195

S. 320C and cross-heading inserted (1.1.2015) by Finance Act 2014 (c. 26), s. 12(2)(4); S.I. 2014/3226, art. 2

320CRecommended medical treatment

1

No liability to income tax arises in respect of—

a

the provision to an employee of recommended medical treatment, or

b

in respect of which subsection (1) would prevent liability to income tax from arising in the tax year disregarding subsection (2).

7

In this section—

“medical treatment” means all procedures for diagnosing or treating any physical or mental illness, infirmity or defect;
“relevant salary sacrifice arrangements” 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 recommended medical treatment or the payment or reimbursement of the cost of such treatment;
“relevant flexible remuneration arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee and employer agree that the employee is to be provided with recommended medical treatment or the cost of such treatment is to be paid or reimbursed, rather than the employee receiving some other description of employment income;
“specified” means specified in regulations under subsection (3)(c).

Awards and gifts

321Suggestion awards

1

In this section—

“the appropriate proportion” means such proportion as the award bears to the total of the financial benefit awards made on the same occasion for the suggestion,
“the residue of the suggestion maximum” means the suggestion maximum less the total previous exemption, and
“the total previous exemption” means the total of the amounts exempted from income tax under section 321 in respect of financial benefit awards for the suggestion made on previous occasions.

323Long service awards

1

No liability to income tax arises in respect of a long service award which meets the condition in subsection (3) if or to the extent that the chargeable amount does not exceed the permitted maximum.

2

In subsection (1)—

“chargeable amount” means the amount of employment income which would be charged to tax in respect of the award apart from subsection (1),
“long service award” means an award made to an employee to mark not less than 20 years' service with the same employer, and
“permitted maximum” means F3£50 for each year of service in respect of which the award is made.

3

The condition is that the award must take the form of—

a

tangible moveable property,

b

shares in a company which is, or belongs to the same group as, the employer, or

c

the provision of any other benefit except—

i

a payment,

ii

a cash voucher,

iii

a credit-token,

iv

securities,

v

shares not within paragraph (b), or

vi

an interest in or rights over securities or shares.

4

Subsection (1) does not apply to an award (“the later award”) if another award to mark a particular period of service with the same employer has been made to the employee in the period of 10 years ending with the date on which the later award is made.

5

For the purposes of this section, service is treated as being with the same employer if it is with two or more employers—

a

each of whom is a successor or predecessor of the others, or

b

one of whom is a company which belongs or has belonged to the same group as the others or a predecessor or successor of the others.

6

In this section “group” means a body corporate and its 51% subsidiaries.

For the purposes of subsection (1) “eligible benefits” means benefits in respect of which conditions A to D in section 323A are met.

C54

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.

323CPower to amend sections 323A and 323B

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.

1

Annotations:

Amendments (Textual)

F158

S. 326A and cross-heading inserted (with effect in accordance with s. 39(2) of the amending Act) by Finance Act 2011 (c. 11), s. 39(1)

326AFees relating to monitoring schemes relating to vulnerable persons

1

No liability to income tax arises by virtue of the payment or reimbursement of a fee in respect of F178—

F180a

an application to join the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007 (asp 14) (scheme to collate and disclose information about individuals working with vulnerable persons).

F179b

a fee paid by virtue of section 116A(4)(b) or (5)(b) of the Police Act 1997 (“the Police Act”) (fee for up-dating certificates);

c

a fee paid under—

i

section 113A(1)(b) of the Police Act (fee for criminal record certificates);

ii

section 113B(1)(b) of the Police Act (fee for enhanced criminal record certificates);

iii

iii)section 114(1)(b) of the Police Act (fee for criminal record certificates: Crown employment); or

iv

iv)section 116(1)(b) of the Police Act (fee for enhanced criminal record certificates: judicial appointments and Crown employment);

where the application is made at the same time as an application under section 116A(4) or (5) of the Police Act for the certificate to be subject to up-date arrangements.

2

The Treasury may by order amend subsection (1) so as—

a

to add to the fees covered by that subsection a fee of a specified kind payable in connection with a scheme for England and Wales or Northern Ireland which corresponds to the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007, or

b

to amend or remove a reference to a fee added under paragraph (a).

F187Employee shareholder agreements

Annotations:

Amendments (Textual)

F187

S. 326B and cross-heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 37, 38; S.I. 2013/1755, art. 2

326BAdvice relating to proposed employee shareholder agreements

1

No liability to income tax arises by virtue of—

a

the provision of relevant advice by a relevant independent adviser, or

b

the payment or reimbursement, in accordance with section 205A(7) of the Employment Rights Act 1996, of any reasonable costs incurred in obtaining relevant advice.

2

“Relevant advice” means—

a

advice, other than tax advice, which is provided for the purposes of section 205A(6)(a) of that Act (advice as to terms and effect of employee shareholder agreement), and

b

tax advice which is so provided and consists only of an explanation of the tax effects of employee shareholder agreements generally.

3

In this section—

“employee shareholder agreement” means an agreement by virtue of which an employee is an employee shareholder (see section 205A(1)(a) to (d) of that Act);
“relevant independent adviser” has the meaning that it has for the purposes of section 203(3)(c) of that Act.