Part 3Employment income: earnings and benefits etc. treated as earnings
Chapter 7Taxable benefits: loans
Benefit of taxable cheap loan treated as earnings
179Exception for certain advances for necessary expenses
1
An advance by an employer to an employee for the purpose of paying for—
a
necessary expenses, or
b
incidental overnight expenses,
is not a taxable cheap loan in relation to a particular tax year if the following conditions are met.
2
The conditions are—
a
that at all times in the tax year in question the amount outstanding on such advances made by the employer to the employee does not exceed £1,000,
b
that the advance is spent within 6 months after the date on which it is made, and
c
that the employee accounts to the employer at regular intervals for the expenditure of the amount advanced.
3
If, on an application made by the employer, F2an officer of Revenue and Customs is satisfied that there is good reason to do so in the case of a particular advance, F1the officer may authorise that either or both of the following limits are increased in relation to that advance—
a
the sum of money specified in subsection (2)(a);
b
the time limit specified in subsection (2)(b).
4
An application under subsection (3)—
a
must be in writing, and
b
must contain such particulars and be supported by such evidence as F3an officer of Revenue and Customs may require.
5
In this section “necessary expenses” are expenses (including travel expenses) which—
a
the employee is obliged to incur and pay as holder of the employment, and
b
are necessarily incurred in the performance of the duties of the employment.
6
In this section “incidental overnight expenses” are expenses which—
a
are incidental to the employee’s absence from the place where the employee normally lives,
b
relate to a continuous period of such absence in relation to which the overnight stay conditions are met, and
c
would not be deductible under Part 5 if the employee incurred and paid them and Chapter 2 of Part 4 (mileage allowances and passenger payments) did not apply.
7
In subsection (6)(b) “the overnight stay conditions” has the same meaning as in section 240 (exemption for incidental overnight expenses) (see section 240(4)).