The Income Tax (Pay As You Earn) Regulations 2003

Excluded business expenses

5.—(1) “Excluded business expenses” means expenses within Chapter 3 of Part 3 of ITEPA (earnings and benefits treated as earnings) which the Inland Revenue have authorised the employer to exclude from relevant payments in accordance with this regulation.

(2) The Inland Revenue may authorise an employer to exclude any payment of expenses from relevant payments if the Inland Revenue are of the opinion that a deduction or relief will, or is likely to, result in no tax being payable as a result of the payment.

(3) The Inland Revenue may authorise the exclusion of—

(a) specific expenses or a class of expenses,

(b) expenses paid by a specific employer or a class of employers, and

(c) expenses paid to a specific employee or a class of employees.

(4) The Inland Revenue must notify an employer of any excluded business expenses and the date from which the exclusion is to apply.

(5) The Inland Revenue may revoke the authorisation to exclude business expenses by giving notice to the employer specifying the date of the notice or a subsequent date as the date from which the revocation has effect.