Income Tax (Earnings and Pensions) Act 2003

386 Charge on payments to non-approved retirement benefits schemes

(1) A sum paid by an employer—

(a) in accordance with a non-approved retirement benefits scheme, and

(b) with a view to the provision of relevant benefits for or in respect of an employee of the employer,

counts as employment income of the employee for the relevant tax year.

(2) The “relevant tax year” is the tax year in which the sum is paid.

(3) Subsection (1) does not apply if or to the extent that the sum is chargeable to income tax as the employee’s income apart from this section.

(4) But if, apart from this section, the payment of the sum would be a payment to which Chapter 3 of this Part (payments and benefits on termination of employment etc.) would apply, subsection (1) applies to the sum (and accordingly that Chapter does not apply to it).

(5) In this Chapter—

(a) “employee” includes a person who is to be or has been an employee,

(b) section 5(1) (application to offices) does not apply, but “employee”, in relation to a company, includes any officer or director of the company and any other person taking part in the management of the affairs of the company,

(c) “employer” and “employment” have meanings corresponding to the meaning of “employee” given by paragraphs (a) and (b),

(d) “director” has the meaning given by section 612(1) of ICTA, and

(e) “relevant benefits” has the meaning given by that section, and section 612(2) of ICTA applies to references in this Chapter to the provision of relevant benefits as it applies to such references in Chapter 1 of Part 14 of ICTA.

(6) For the purposes of this Chapter benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.

(7) Any liability to tax arising by virtue of this section is subject to the reliefs given under—

(a) section 392 (relief where no benefits are paid or payable), and

(b) section 266A of ICTA (life assurance premiums paid by employer).