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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 3 — Exemptions: other transport, travel and subsistence

    122

 

     (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.

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     (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—

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           (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

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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—

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                    “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—

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                         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

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purposes of this section as it applies for the purposes of section 138.

 248   Transport home: late night working and failure of car-sharing arrangements

     (1)    No liability to income tax arises in respect of the provision of transport or the

payment or reimbursement of expenses incurred on transport if—

           (a)           the transport is for a journey from the employee’s workplace to the

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employee’s home,

           (b)           the late working conditions or the car-sharing failure conditions are

met, and

           (c)           the number of previous occasions in the tax year on which the

provision of transport within this section or the payment or

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reimbursement of expenses within this section has occurred is lower

than 60.

     (2)    The late working conditions are that—

           (a)           the journey is made on an occasion when the employee is required to

work later than usual and until at least 9 p.m.,

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           (b)           such occasions occur irregularly,

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 4 — Exemptions: education and training

    123

 

           (c)           by the time when the employee ceases work—

                  (i)                 public transport has ceased to be available for the journey, or

                  (ii)                it would not be reasonable to expect the employee to use it, and

           (d)           the transport is by taxi or similar private road transport.

     (3)    The car-sharing failure conditions are that—

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           (a)           the employee regularly travels to work in a car with one or more other

employees of the employee’s employer under arrangements for the

sharing of the car with them, and

           (b)           the journey is made on an occasion when the employee is unable to use

the car because of unforeseen and exceptional circumstances.

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 249   Interpretation 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

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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

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of a journey—

                  (a)                 between the employee’s home and workplace,

                  (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

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section 339.

Chapter 4

Exemptions: education and training

Work-related training

 250   Exemption of work-related training provision

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     (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

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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,

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           (b)           expenses incurred in connection with an examination or other

assessment of what the employee has gained from the training, and

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 4 — Exemptions: education and training

    124

 

           (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.

 251   Meaning of “work-related training”

     (1)    In this Chapter “work-related training”, in relation to an employee, means a

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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—

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                  (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

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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

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course.

 252   Exception 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.

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     (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.

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     (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—

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                    “mileage allowance payments” has the meaning given by section 229(2),

and

                    “subsistence” includes food, drink and temporary living accommodation.

 253   Exception where provision for excluded purposes

     (1)    Section 250 does not apply if or to the extent that the facilities or other benefits

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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—

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 4 — Exemptions: education and training

    125

 

           (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

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           (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.

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     (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).

 254   Exception where unrelated assets are provided

     (1)    Section 250 does not apply if the benefit that is provided or the cost of which is

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paid or reimbursed is, or is the use of, an asset that is not a training-related

asset.

     (2)    “Training-related asset”, in relation to work-related training provided to an

employee, means—

           (a)           an asset provided for use only—

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                  (i)                 in the course of the training, or

                  (ii)                in the course of the training and in the performance of the duties

of the employee’s employment,

           (b)           training materials provided in the course of the training, or

           (c)           something made by the employee in the course of the training or

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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.

Individual learning account training

 255   Exemption for contributions to individual learning account training

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     (1)    No liability to income tax in respect of income from a current or former

employment arises by virtue of—

           (a)           the provision to a person within subsection (2) (“the employee”) of

individual learning account training that is given by a person who is

not the employee’s employer or former employer,

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           (b)           any payment to the person giving the training in respect of the cost of

that provision,

           (c)           the provision to the employee of any benefit incidental to such training,

or

           (d)           the payment or reimbursement of any costs in respect of such training

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of a kind specified in subsection (3).

     (2)    A person is within this subsection if the person either—

           (a)           holds an account that qualifies under section 104 of the Learning and

Skills Act 2000 (c. 21), or

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 4 — Exemptions: education and training

    126

 

           (b)           is a party to arrangements that qualify under section 105 or 106 of that

Act or section 2 of the Education and Training (Scotland) Act 2000 (asp.

8).

     (3)    The costs are—

           (a)           costs which are incidental to the employee undertaking the training,

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           (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.

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 256   Meaning of “individual learning account training”

In this Chapter “individual learning account training” means training or

education of a kind that qualifies for grants authorised by—

           (a)           regulations under section 108 or 109 of the Learning and Skills Act 2000

(c. 21), or

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           (b)           regulations under section 1 of the Education and Training (Scotland)

Act 2000 (asp. 8).

 257   Exception for non-deductible travel expenses

     (1)    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

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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

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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.

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     (5)    In this section—

                    “mileage allowance payments” has the meaning given by section 229(2),

and

                    “subsistence” includes food, drink and temporary living accommodation.

 258   Exception where provision for excluded purposes

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     (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—

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           (a)           enabling the employee or former employee to enjoy the facilities or

benefits for entertainment or recreational purposes, and

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 4 — Exemptions: education and training

    127

 

           (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

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in the course of a leisure activity.

 259   Exception 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.

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     (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

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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.

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     (3)    For this purpose “training materials” includes stationery, books or other

written material, audio or video tapes, compact disks or floppy disks.

 260   Exception 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

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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

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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

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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.

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     (5)    In this section “Crown servant” means a person holding an employment under

the Crown.

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 5 — Exemptions: recreational benefits

    128

 

Chapter 5

Exemptions: recreational benefits

Recreational facilities

 261   Exemption of recreational benefits

     (1)    No liability to income tax arises in respect of the provision to an employee or a

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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

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           (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.

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     (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—

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           (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

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           (b)           the facilities are provided so as to be available generally to that

employer’s employees.

 262   Benefits not exempted by section 261

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

benefits—

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           (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

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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—

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                    “domestic premises” means—

                  (a)                 premises used wholly or mainly as a private dwelling, or

 

 

 
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