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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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 88    Year in which earnings treated as received

     (1)    In the case of a non-cash voucher other than a cheque voucher, the amount

treated as earnings under section 87 is to be treated as received—

           (a)           in the tax year in which the cost of provision is incurred, or

           (b)           if later, in the tax year in which the voucher is received by the

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employee.

     (2)    In the case of a cheque voucher, the amount treated as earnings under section

87 is to be treated as received in the tax year in which the voucher is handed

over in exchange for money, goods or services.

     (3)    Where a cheque voucher is posted it is to be treated as handed over at the time

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of posting.

 89    Reduction for meal vouchers

     (1)    This section applies where—

           (a)           the non-cash voucher is a meal voucher,

           (b)           it is provided for an employee for use on a working day, and

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           (c)           meal vouchers are made available to all employees (if any) employed

by the same employer in lower-paid employment within the meaning

of Chapter 11 of this Part (see section 217).

     (2)    The total of the cash equivalents of the benefit of any meal vouchers so

provided is to be reduced by 15p for each working day for which the vouchers

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are provided.

     (3)    In this section—

                    “meal voucher” means a non-cash voucher which—

                  (a)                 can only be used to obtain meals,

                  (b)                 is not transferable, and

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                  (c)                 is not of the kind in respect of which no liability to income tax

arises under section 266(3)(e) (subsidised meals), and

                    “working day” means a day on which the employee is at work.

     (4)    Section 83 (references to provision for an employee include provision for a

member of the employee’s family) does not apply to subsection (1)(b).

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Credit-tokens: introduction

 90    Credit-tokens to which this Chapter applies

     (1)    This Chapter applies to a credit-token provided for an employee by reason of

the employment which is used by the employee to obtain money, goods or

services.

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     (2)    A credit-token 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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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

    45

 

 91    Provision for, or use by, member of employee’s family

For the purposes of this Chapter—

           (a)           any reference to a credit-token being provided for an employee

includes a reference to it being provided for a member of the

employee’s family, and

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           (b)           use of a credit-token by a member of an employee’s family is to be

treated as use of the token by the employee.

Meaning of "credit-token"

 92    Meaning of “credit-token”

     (1)    In this Chapter “credit-token” means a credit card, debit card or other card, a

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token, a document or other object given to a person by another person (“X”)

who undertakes—

           (a)           on the production of it, to supply money, goods or services on credit, or

           (b)           if a third party (“Y”) supplies money, goods or services on its

production, to pay Y for what is supplied.

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     (2)    A card, token, document or other object can be a credit-token even if—

           (a)           some other action is required in addition to its production in order for

the money, goods or services to be supplied;

           (b)           X in paying Y may take a discount or commission.

     (3)    For the purposes of this section—

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           (a)           the use of an object given by X to operate a machine provided by X is to

be treated as its production to X, and

           (b)           the use of an object given by X to operate a machine provided by Y is to

be treated as its production to Y.

     (4)    A “credit-token” does not include a cash voucher or a non-cash voucher.

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Credit-tokens: exception

 93    Credit-token made available to public generally

This Chapter does not apply to a credit-token if—

           (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

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no more favourable terms than to the public generally.

Benefit of credit-token treated as earnings

 94    Benefit of credit-token treated as earnings

     (1)    On each occasion on which a credit-token to which this Chapter applies is used

by the employee in a tax year to obtain money, goods or services, the cash

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equivalent of the benefit of the token is to be treated as earnings from the

employment for that year.

     (2)    The cash equivalent is the difference between—

           (a)           the cost of provision, and

 

 

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

    46

 

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

incurring it.

     (3)    In this section the “cost of provision” means the expense incurred—

           (a)           in or in connection with the provision of the money, goods or services

obtained on the occasion in question, and

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           (b)           by the person at whose cost they are provided.

     (4)    If a person incurs expense in or in connection with the provision of credit-

tokens 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 is just

and reasonable.

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General supplementary provisions

 95    Disregard for money, goods or services obtained

     (1)    This section applies if the cash equivalent of the benefit of a cash voucher, a

non-cash voucher or a credit-token—

           (a)           is to be treated as earnings from an employee’s employment under this

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Chapter, or

           (b)           would be so treated but for a dispensation given under section 96.

     (2)    Money, goods or services obtained—

           (a)           by the employee or another person in exchange for the cash voucher or

non-cash voucher, or

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           (b)           by the employee or a member of the employee’s family by use of the

credit-token,

            are to be disregarded for the purposes of the Income Tax Acts.

     (3)    But the goods or services are not to be disregarded for the purposes of applying

sections 362 and 363 (deductions where non-cash voucher or credit-token

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provided).

     (4)    In the case of a transport voucher, the reference in subsection (2)(a) to the

services obtained in exchange for the voucher is to the passenger transport

services obtained by using it.

 96    Dispensations relating to vouchers or credit-tokens

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     (1)    This section applies where a person (“P”) supplies the Inland Revenue with a

statement of the cases and circumstances in which—

           (a)           cash vouchers,

           (b)           non-cash vouchers, or

           (c)           credit-tokens,

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            are provided for employees whether they are the employees of P or some other

person.

     (2)    If the Inland Revenue are satisfied that no additional tax is payable by virtue of

this Chapter by reference to the vouchers or credit-tokens mentioned in the

statement, they must give P a dispensation under this section.

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     (3)    A “dispensation” is a notice stating that the Inland Revenue agree that no

additional tax is payable by virtue of this Chapter by reference to the vouchers

or credit-tokens mentioned in the statement supplied by P.

 

 

Income Tax (Earnings and Pensions) Bill
Part 3 — Employment income: earnings and benefits etc. treated as earnings
Chapter 5 — Taxable benefits: living accommodation

    47

 

     (4)    If a dispensation is given under this section, nothing in this Chapter applies to

the provision or use of the vouchers or credit-tokens covered by the

dispensation.

     (5)    If in their opinion there is reason to do so, the Inland Revenue may revoke a

dispensation by giving a further notice to P.

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     (6)    That notice may revoke the dispensation from—

           (a)           the date when the dispensation was given, or

           (b)           a later date specified in the notice.

     (7)    If the notice revokes the dispensation from the date when the dispensation was

given—

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           (a)           any liability to tax that would have arisen if the dispensation had never

been given is to be treated as having arisen, and

           (b)           P and the employees in question must make all the returns which they

would have had to make if the dispensation had never been given.

     (8)    If the notice revokes the dispensation from a later date—

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           (a)           any liability to tax that would have arisen if the dispensation had

ceased to have effect on that date is to be treated as having arisen, and

           (b)           P and the employees in question must make all the returns which they

would have had to make if the dispensation had ceased to have effect

on that date.

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Chapter 5

Taxable benefits: living accommodation

Living accommodation

 97    Living accommodation to which this Chapter applies

     (1)    This Chapter applies to living accommodation provided for—

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           (a)           an employee, or

           (b)           a member of an employee’s family or household,

            by reason of the employment.

     (2)    Living accommodation provided for any of those persons by the employer is

to be regarded as provided by reason of the employment unless—

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           (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.

Exceptions

 98    Accommodation provided by local authority

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This Chapter does not apply to living accommodation provided for an

employee if—

           (a)           the employer is a local authority,

           (b)           it is provided for the employee by the authority, and

 

 

Income Tax (Earnings and Pensions) Bill
Part 3 — Employment income: earnings and benefits etc. treated as earnings
Chapter 5 — Taxable benefits: living accommodation

    48

 

           (c)           the terms on which it is provided are no more favourable than those on

which similar accommodation is provided by the authority for persons

who are not their employees but whose circumstances are otherwise

similar to those of the employee.

 99    Accommodation provided for performance of duties

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     (1)    This Chapter does not apply to living accommodation provided for an

employee if it is necessary for the proper performance of the employee’s duties

that the employee should reside in it.

     (2)    This Chapter does not apply to living accommodation provided for an

employee if—

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           (a)           it is provided for the better performance of the duties of the

employment, and

           (b)           the employment is one of the kinds of employment in the case of which

it is customary for employers to provide living accommodation for

employees.

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     (3)    But if the accommodation is provided by a company and the employee (“E”) is

a director of the company or of an associated company, the exception in

subsection (1) or (2) only applies if, in the case of each company of which E is a

director—

           (a)           E has no material interest in the company, and

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           (b)           either—

                  (i)                 E’s employment is as a full-time working director, or

                  (ii)                the company is non-profit-making or is established for

charitable purposes only.

     (4)    “Non-profit-making” means that the company does not carry on a trade and its

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functions do not consist wholly or mainly in the holding of investments or

other property.

     (5)    A company is “associated” with another if—

           (a)           one has control of the other, or

           (b)           both are under the control of the same person.

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 100   Accommodation provided as result of security threat

This Chapter does not apply to living accommodation provided for an

employee if—

           (a)           there is a special threat to the security of the employee,

           (b)           special security arrangements are in force, and

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           (c)           the employee resides in the accommodation as part of those

arrangements.

 101   Chevening House

This Chapter does not apply to living accommodation provided for an

employee if the accommodation is—

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           (a)           Chevening House, or

           (b)           any other premises held on the trusts of the trust instrument set out in

the Schedule to the Chevening Estate Act 1959 (c. 49),

            and the employee is a person nominated in accordance with those trusts.

 

 

 
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Revised 17 February 2003