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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 3 — Employment income: earnings and benefits etc. treated as earnings
Chapter 4 — Taxable benefits: vouchers and credit-tokens

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Meaning of "cash voucher"

 75    Meaning of “cash voucher”

     (1)    In this Chapter “cash voucher” means a voucher, stamp or similar document

capable of being exchanged for a sum of money which is—

           (a)           greater than,

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           (b)           equal to, or

           (c)           not substantially less than,

            the expense incurred by the person at whose cost the voucher, stamp or similar

document is provided.

     (2)    For the purposes of subsection (1) it does not matter whether the document—

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           (a)           is also capable of being exchanged for goods or services;

           (b)           is capable of being exchanged singly or together with other vouchers,

stamps, or documents;

           (c)           is capable of being exchanged immediately or only after a time.

     (3)    Subsection (1) is subject to section 76 (sickness benefits-related voucher).

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 76    Sickness benefits-related voucher

     (1)    This section applies where—

           (a)           the expense incurred by the person at whose cost a voucher, stamp or

similar document is provided (“the provision expense”) includes costs

to that person of providing sickness benefits (“sickness benefits costs”),

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           (b)           the voucher, stamp or document would be a cash voucher (apart from

this section) but for the fact that the sum of money for which it is

capable of being exchanged (“the exchange sum”) is substantially less

than the provision expense, and

           (c)           the whole or part of the difference between the exchange sum and the

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provision expense represents the sickness benefits costs.

     (2)    The voucher, stamp or document is a cash voucher within the meaning of this

Chapter if—equation: equal[char[E],plus[times[char[P],char[E]],minus[char[D]]]]

            orequation: plus[string["E is not substantially less than PE"],minus[char[D]]]

            

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            where—

                    E is the exchange sum,

                    PE is the provision expense, and

                    D is the amount of the difference between E and PE which represents the

sickness benefits costs.

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     (3)    In this section “sickness benefits” mean benefits in connection with sickness,

personal injury or death.

 77    Apportionment of cost of provision of voucher

If a person incurs expense in or in connection with the provision of vouchers,

stamps or similar documents for two or more employees as members of a

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Income Tax (Earnings and Pensions) Bill
Part 3 — Employment income: earnings and benefits etc. treated as earnings
Chapter 4 — Taxable benefits: vouchers and credit-tokens

    41

 

group or class, the expense incurred in respect of one of them is to be such part

of that expense as is just and reasonable.

Cash vouchers: exceptions

 78    Voucher made available to public generally

This Chapter does not apply to a cash voucher if—

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           (a)           it is of a kind made available to the public generally, and

           (b)           it is provided to the employee or a member of the employee’s family on

no more favourable terms than to the public generally.

 79    Voucher issued under approved scheme

     (1)    This Chapter does not apply to a cash voucher received by an employee if—

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           (a)           it is issued under a scheme, and

           (b)           at the time when it is received the scheme is a scheme approved by the

Inland Revenue for the purposes of this section.

     (2)    The Inland Revenue must not approve a scheme for the purposes of this section

unless they are satisfied that it is practicable for income tax in respect of all

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payments made in exchange for vouchers issued under the scheme to be

deducted in accordance with PAYE regulations.

 80    Vouchers where payment of sums exempt from tax

This Chapter does not apply to a cash voucher if it is—

           (a)           a document intended to enable a person to obtain payment of a sum

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which would not have constituted employment income if paid to the

person directly, or

           (b)           a savings certificate where the accumulated interest payable in respect

of it is exempt from tax (or would be so exempt if certain conditions

were met).

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Benefit of cash voucher treated as earnings

 81    Benefit of cash voucher treated as earnings

     (1)    The cash equivalent of the benefit of a cash voucher to which this Chapter

applies is to be treated as earnings from the employment for the tax year in

which the voucher is received by the employee.

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     (2)    The cash equivalent is the sum of money for which the voucher is capable of

being exchanged.

Non-cash vouchers: introduction

 82    Non-cash vouchers to which this Chapter applies

     (1)    This Chapter applies to a non-cash voucher provided for an employee by

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reason of the employment which is received by the employee.

 

 

Income Tax (Earnings and Pensions) Bill
Part 3 — Employment income: earnings and benefits etc. treated as earnings
Chapter 4 — Taxable benefits: vouchers and credit-tokens

    42

 

     (2)    A non-cash voucher provided for an employee by the employer is to be

regarded as provided by reason of the employment unless—

           (a)           the employer is an individual, and

           (b)           the provision is made in the normal course of the employer’s domestic,

family or personal relationships.

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     (3)    A non-cash voucher provided for an employee and appropriated to the

employee—

           (a)           by attaching it to a card held for the employee, or

           (b)           in any other way,

            is to be treated for the purposes of this Chapter as having been received by the

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employee at the time when it is appropriated.

 83    Provision for, or receipt by, member of employee’s family

For the purposes of this Chapter any reference to a non-cash voucher being

provided for or received by an employee includes a reference to it being

provided for or received by a member of the employee’s family.

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Meaning of "non-cash voucher"

 84    Meaning of “non-cash voucher”

     (1)    In this Chapter “non-cash voucher” means—

           (a)           a voucher, stamp or similar document or token which is capable of

being exchanged for money, goods or services,

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           (b)           a transport voucher, or

           (c)           a cheque voucher,

            but does not include a cash voucher.

     (2)    For the purposes of subsection (1)(a) it does not matter whether the document

or token is capable of being exchanged—

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           (a)           singly or together with other vouchers, stamps, documents or tokens;

           (b)           immediately or only after a time.

     (3)    In this Chapter “transport voucher” means a ticket, pass or other document or

token intended to enable a person to obtain passenger transport services

(whether or not in exchange for it).

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     (4)    In this Chapter “cheque voucher” means a cheque—

           (a)           provided for an employee, and

           (b)           intended for use by the employee wholly or mainly for payment for—

                  (i)                 particular goods or services, or

                  (ii)                goods or services of one or more particular classes;

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            and, in relation to a cheque voucher, references to a voucher being exchanged

for goods or services are to be read accordingly.

Non-cash voucher: exceptions

 85    Non-cash voucher made available to public generally

This Chapter does not apply to a non-cash voucher if—

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Income Tax (Earnings and Pensions) Bill
Part 3 — Employment income: earnings and benefits etc. treated as earnings
Chapter 4 — Taxable benefits: vouchers and credit-tokens

    43

 

           (a)           it is of a kind made available to the public generally, and

           (b)           it is provided to the employee or a member of the employee’s family on

no more favourable terms than to the public generally.

 86    Transport vouchers under pre-26th March 1982 arrangements

     (1)    This Chapter does not apply to a transport voucher provided for an employee

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of a passenger transport undertaking under arrangements in operation on 25th

March 1982 which meet the condition in subsection (2).

     (2)    The condition is that the arrangements are intended to enable the employee or

a member of the employee’s family to obtain passenger transport services

provided by—

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           (a)           the employer,

           (b)           a subsidiary of the employer,

           (c)           a body corporate of which the employer is a subsidiary, or

           (d)           another passenger transport undertaking.

     (3)    In this section—

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                    “passenger transport undertaking” means an undertaking whose

business consists wholly or mainly in the carriage of passengers or a

subsidiary of such an undertaking, and

                    “subsidiary” means a wholly-owned subsidiary within the meaning of

section 736 of the Companies Act 1985 (c. 6).

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Benefit of non-cash voucher treated as earnings

 87    Benefit of non-cash voucher treated as earnings

     (1)    The cash equivalent of the benefit of a non-cash voucher to which this Chapter

applies is to be treated as earnings from the employment for the tax year in

which the voucher is received by the employee.

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     (2)    The cash equivalent is the difference between—

           (a)           the cost of provision, and

           (b)           any part of that cost made good by the employee to the person

incurring it.

     (3)    In this Chapter the “cost of provision” means, in relation to a non-cash voucher,

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the expense incurred in or in connection with the provision of—

           (a)           the voucher, and

           (b)           the money, goods or services for which it is capable of being exchanged,

            by the person at whose cost they are provided.

     (4)    In the case of a transport voucher, the reference in subsection (3)(b) to the

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services for which the voucher is capable of being exchanged is to the

passenger transport services which may be obtained by using it.

     (5)    If a person incurs expense in or in connection with the provision of non-cash

vouchers for two or more employees as members of a group or class, the

expense incurred in respect of one of them is to be such part of that expense as

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is just and reasonable.

     (6)    This section is subject to section 89 (reduction for meal vouchers).

 

 

 
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Revised 17 February 2003