Joint Committee on Tax Law Rewrite Bills Minutes of Evidence


Before and after the Rewrite: examples

BEFORE (1)

ICTA 1988

166.   Notice of nil liability under this Chapter
  (1)  If a person furnishes to the inspector a statement of the cases and circumstances in which payments of a particular character are made, or benefits or facilities of a particular kind are provided, for any employees (whether his own or those of anyone else), and the inspector is satisfied that no additional tax is payable under this Chapter by reference to the payments, benefits or facilities mentioned in the statement, the inspector shall notify the person accordingly; and then nothing in this Chapter applies to those payments, or to the provision of those benefits or facilities, or otherwise for imposing any additional charge to income tax.

  (106 word sentence)

AFTER (1)

65.   Dispensations relating to benefits within provisions not applicable to lower-paid employment
  (1)  This section applies for the purposes of the listed provisions where a person ("P") supplies the Inland Revenue with a statement of the cases and circumstances in which—

    (a)  payments of a particular character are made to or for any employees, or

    (b)  benefits or facilities of a particular kind are provided for any employees,

whether the employees are P's or another's.

  (2)  The "listed provisions" are the provisions listed in section 216(4) (provisions of the benefits code which do not apply to lower-paid employment).

  (3)  If the Inland Revenue are satisfied that no additional tax is payable by virtue of the listed provisions by reference to the payments, benefits or facilities mentioned in the statement, they must give P a dispensation under this section.

  (4)  A "dispensation" is a notice stating that the Inland Revenue agree that no additional tax is payable by virtue of the listed provisions by reference to the payments, benefits or facilities mentioned in the statement supplied by P.

  (5)  If a dispensation is given under this section, nothing in the listed provisions applies to the payments, or the provision of the benefits or facilities, covered by the dispensation or otherwise has the effect of imposing any additional liability to tax in respect of them.

BEFORE (2)

ICTA 1988

199.   Expenses necessarily incurred and defrayed from official emoluments
  (1)  Subject to the provisions of subsection (2) below, where the Treasury are satisfied with respect to any class of persons in receipt of any salary, fees or emoluments payable out of the public revenue that such persons are obliged to lay out and expend money wholly, exclusively and necessarily in the performance of the duties in respect of which such salary, fees or emoluments are payable, the Treasury may fix such sum as in the opinion of the Treasury represents a fair equivalent of the average annual amount laid out and so expended by persons of that class, and in charging income tax on that salary or those fees or emoluments there shall be deducted from the amount thereof the sums so fixed by the Treasury.

  (126 word sentence)

AFTER (2)

368.   Fixed sum deductions from earnings payable out of public revenue
  (1)  A deduction is allowed from earnings payable out of the public revenue for the employee's fixed sum expenses in respect of the duties to which the earnings relate.

  (2)  "Fixed sum expenses" means the sum, if any, fixed by the Treasury as in their opinion representing the average annual expenses which employees of the employee's description are obliged to pay wholly, exclusively and necessarily in the performance of duties to which such earnings relate.

BEFORE 3

ICTA 1988

195.   Travel expenses of employees not domiciled in the United Kingdom
  (1)  Subject to subsection (2) below, this section applies in the case of an office or employment in respect of which a person ("the employee") who is not domiciled in the United Kingdom is in receipt of emoluments for duties performed in the United Kingdom.

  (2)  This section does not apply unless subsection (3) below is satisfied in respect of a date on which the employee arrives in the United Kingdom to perform duties of the office or employment; and where subsection (3) is so satisfied, this section applies only for a period of five years beginning with that date.

  (3)  This subsection is satisfied in respect of a date if the employee:

    (a)  was not resident in the United Kingdom in either of the two years of assessment immediately preceding the year of assessment in which the date falls; or

    (b)  was not in the United Kingdom for any purpose at any time during the period of two years ending with the day immediately preceding the date.

  (4)  Where subsection (3) above is satisfied (by virtue of paragraph (a) of that subsection) in respect of more than one date in any year of assessment, only the first of those dates is relevant for the purposes of this section.

  (5)  Subsection (7) below applies to any journey by the employee:

    (a)  from his usual place of abode to any place in the United Kingdom in order to perform any duties of the office or employment there; or

    (b)   to his usual place of abode from any place in the United Kingdom after performing such duties there.

  (6)  Where the employee is in the United Kingdom for a continuous period of 60 days or more for the purpose of performing the duties of one or more offices or employments in the case of which this section applies, subsection (7) below applies to any journey by his spouse, or any child of his, between his usual place of abode and the place of performance of any of those duties in the United Kingdom, if the journey:

    (a)  is made to accompany his at the beginning of that period or to visit him during it; or

    (b)  is a return journey following a journey falling within paragraph (a) above;

  but subsection (7) as it applies by virtue of this subsection does not extend to more than two journeys to the United Kingdom and two return journeys by the same person in any year of assessment.

  (7)  Subject to subsection (8) below, where:

    (a)  travel facilities are provided for any journey to which this subsection applies and the cost of them is borne by or on behalf of a person who is an employer in respect of any office or employment in the case of which this section applies; or

    (b)  expenses are incurred out of the emoluments of any office or employment in the case of which this section applies on such a journey and those expenses are reimbursed by or on behalf of the employer;

  there shall be allowed, in charging tax under Case I or II of Schedule E on the emoluments from the office or employment concerned, a deduction of an amount equal to so much of that cost or, as the case may be, those expenses as falls to be included in those emoluments.

  (8)  If a journey is partly for a purpose mentioned in subsection (5) or (6) above and partly for another purpose, only so much of the cost or expenses referred to in subsection (7) as is properly attributable to the former purpose shall be taken into account in calculating any deduction made under subsection (7) as it applies by virtue of subsection (5) or, as the case may be, (6).

  (9)  For the purposes of this section a person's usual place of abode is the country (outside the United Kingdom) in which he normally lives.

  (10)  In subsection (6) above "child" includes a step—Child and an illegitimate child but does not include a person who is aged 18 or over at the beginning of the journey to the United Kingdom.

  (11)  References in the Income Tax Acts (including any provision of this Act, but without prejudice to any express reference to subsection (7) above) to section 198 and to deductions allowable under section 198, 199, 201 or 332 shall be construed as including a reference to subsection (7) above and to deductions allowable under it.

  (12)  Where apart from this subsection a deduction in respect of any cost or expenses is allowable under a provision of this section and a deduction in respect of the same cost or expenses is also allowable under another provision of this section or of any other enactment, a deduction in respect of the cost or expenses may be made under either, but not both, of those provisions.

  (13)  Where by virtue of subsection (3) of section 38 of the Finance Act 1986 any provision of section 37 of that Act applied in the case of any employee at any time during the year 1984-85 or 1985-86 (and that section applied to him immediately before 6th April 1988), this section shall apply in his case for the years 1988-89 to 1990-91 as if the following were substituted for subsections (2) to (4):

    "(2) This section does not apply after 5th April 1991.".

AFTER (3)

373.   Non-domiciled employee's travel costs and expenses where duties performed in UK
  (1)  This section applies if a person ("the employee") who is not domiciled in the United Kingdom—

    (a)  receives earnings from an employment for duties performed in the United Kingdom, and

    (b)  an amount is included in the earnings in respect of—

      (i)  the provision of travel facilities for a journey made by the employee, or

      (ii)  the reimbursement of expenses incurred by the employee on such a journey.

  (2)  A deduction is allowed from earnings from the employment which are earnings charged on receipt if the journey meets conditions A and B.

  (3)  Condition A is that the journey ends on, or during the period of 5 years beginning with, a date that is a qualifying arrival date in relation to the employee (see section 375).

  (4)  Condition B is that the journey is made—

    (a)  from the country outside the United Kingdom in which the employee normally lives to a place in the United Kingdom in order to perform duties of the employment, or

    (b)  to that country from a place in the United Kingdom in order to return to that country after performing such duties.

  (5)  If the journey is wholly for a purpose specified in subsection (4), the deduction is equal to the included amount.

  If the journey is only partly for such a purpose, the deduction is equal to so much of the included amount as is properly attributable to that purpose.

374.   Non-domiciled employee's spouse's or child's travel costs and expenses where duties performed in UK
  (1)  This section applies if a person ("the employee") who is not domiciled in the United Kingdom—

    (a)  receives earnings from an employment for duties performed in the United Kingdom, and

    (b)  an amount is included in the earnings in respect of:

      (i)  the provision of travel facilities for a journey made by the employee's spouse or child, or

      (ii)  the reimbursement of expenses incurred by the employee on such a journey.

  (2)  A deduction is allowed from earnings from the employment which are earnings charged on receipt if conditions A to C are met.

  (3)  Condition A is that the journey:

    (a)  is made between the country outside the United Kingdom in which the employee normally lives and a place in the United Kingdom, and

    (b)   ends on, or during the period of five years beginning with, a date that is a qualifying arrival date in relation to the employee (see section 375).

  (4)  Condition B is that the employee is in the United Kingdom for a continuous period of at least 60 days for the purpose of performing the duties of one or more employments from which the employee receives earnings for duties performed in the United Kingdom.

  (5)  Condition C is that the employee's spouse or child is—

    (a)  accompanying the employee at the beginning of that period,

    (b)  visiting the employee during that period, or

    (c)  returning to the country outside the United Kingdom in which the employee normally lives, after so accompanying or visiting the employee.

  (6)  If the journey is wholly for the purpose of so accompanying or visiting the employee or so returning, the deduction is equal to the included amount.

  (7)  If the journey is only partly for that purpose, the deduction is equal to so much of the included amount as is properly attributable to that purpose.

  (8)  A deduction is not allowed under this section for more than two inward journeys and two return journeys by the same person in a tax year.

  In this section "child" includes a stepchild and an illegitimate child, but not a person who is 18 or over at the beginning of the inward journey.

375.   Meaning of "qualifying arrival date"
  (1)  For the purposes of sections 373(3) and 374(3), a date is a qualifying arrival date in relation to a person if—

    (a)  it is a date on which the person arrives in the United Kingdom to perform duties of an employment from which the person receives earnings for duties performed in the United Kingdom, and

    (b)  condition A or B is met.

  (2)  Condition A is that the person has not been in the United Kingdom for any purpose during the period of two years ending with the day before the date.

  (3)  Condition B is that the person was not resident in the United Kingdom in either of the two tax years preceding the tax year in which the date falls.

  If, in a case where condition B applies, there are two or more dates in the tax year on which the person arrives in the United Kingdom to perform duties of an employment from which the person receives earnings for duties performed in the United Kingdom, the qualifying arrival date is the earliest of them.

BEFORE (4) (WHERE ONE HAS TO LOOK TO FIND THE MEANING OF "ACCESSORY" ETC)

Section 168A(9)
  (9)  For the purposes of this section—

    (a)  the inclusive price is the price inclusive of any charge for delivery by the manufacturer, importer or distributor to the seller's place of business and of any relevant tax and, in the case of an accessory, of any charge for fitting it,

    (b)  the relevant day is the day immediately before the date of the relevant car's first registration,

    (c)  a standard accessory is an accessory equivalent to an accessory which, in arriving at the price published as mentioned in subsection (2) above, is assumed to be available with cars of the same kind as the relevant car, and

    (d)  an optional accessory is an accessory other than a standard accessory; and "relevant tax" here means any customs or excise duty, any tax chargeable as if it were a duty of customs, any value added tax and any car tax.

Section 168A(10)
  (10)  For the purposes of this section a qualifying accessory is an accessory which—

    (a)  is made available for use with the car without any transfer of the property in it,

    (b)  is made available by reason of the employee's employment,

    (c)  is attached to the car (whether or not permanently), and

    (d)  is not an accessory necessarily provided for use in the performance of the duties of the employee's employment.

Section 168A(11)
  (11)  For the purposes of this section "accessory" includes any kind of equipment, but does not include a mobile telephone within the meaning given by section 155AA(2) or equipment which falls within section 168AA or 168AB(1).

Section 168AB(1)
  (1)  Equipment by means of which the car is capable of running on road fuel gas shall not be regarded as an accessory for the purposes of section 168A.

Section 168AB(4)
  (4)  This section does not apply in relation to cars to which paragraph 5 of Schedule 6 to this Act applies (bi-fuel cars taxed by reference to CO2 emissions figure).

Section 168B(8)
  (8)  Subsections (10) to (12) of section 168A apply for the purposes of this section as they apply for the purposes of that.

Section 168C(3)
  (3)  Subsections (10) to (12) of section 168A apply for the purposes of this section as they apply for the purposes of that.

Section 168D(5)
  (5)  Subsections (10) and (11) of section 168A apply for the purposes of this section as they apply for the purposes of that.

Section 168F(9)
  (9)  Subsections (10) and (11) of section 168A apply for the purposes of this section as they apply for the purposes of that.

AFTER (4)

125.   Meaning of "accessory" and related terms
  (1)  In this Chapter "qualifying accessory" means an accessory which—

    (a)  is made available for use with the car without any transfer of the property in the accessory,

    (b)  is made available by reason of the employment, and

    (c)  is attached to the car (whether permanently or not).

  (2)  For the purposes of this Chapter "accessory" includes any kind of equipment but does not include:

    (a)  equipment necessarily provided for use in the performance of the duties of the employment;

    (b)  equipment by means of which a car is capable of running on road fuel gas;

    (c)  equipment to enable a disabled person to use a car (see section 172);

    (d)  a mobile telephone (within the meaning given in section 319(2)).

  (3)  But subsection (2)(b) does not apply in relation to a car to which section 137 (different CO2 emissions figure for bi-fuel cars) applies.

  (4)  In this Chapter:

    "standard accessory" means an accessory equivalent to an accessory assumed to be available with cars of the same kind as the car in question in arriving at the list price, and

    "non-standard accessory" means any other accessory.


 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2003
Prepared 10 February 2003