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Income Tax (Earnings and Pensions) Bill


 

Income Tax (Earnings and Pensions) Bill

 

[NOTE: This Bill has been certified by the Speaker as a Money Bill.]

 
 

EXPLANATORY NOTES

Explanatory Notes to the Bill, prepared by the Tax Law Rewrite Project at the Inland

Revenue, are published separately as HL Bill 33—EN.

TABLES

A Table of Origins and a Table of Destinations for the Bill are available in a separate

volume. The Tables have no official status.

EUROPEAN CONVENTION ON HUMAN RIGHTS

The Lord McIntosh of Haringey has made the following statement under section

19(1)(a) of the Human Rights Act 1998:

In my view the provisions of the Income Tax (Earnings and Pensions) Bill are

compatible with the Convention rights.

 
HL Bill 3353/2
 
 

 

Income Tax (Earnings and Pensions) Bill

 

This Bill is divided into two volumes. Volume I contains Clauses 1 to 564.

 

Volume II contains Clauses 565 to 725 and the Schedules.

 

 
 

Contents

Part 1

Overview

      1        Overview of contents of this Act

      2        Abbreviations and defined expressions

Part 2

Employment income: charge to tax

Chapter 1

Introduction

      3        Structure of employment income Parts

      4        “Employment” for the purposes of the employment income Parts

      5        Application to offices and office-holders

Chapter 2

Tax on employment income

      6        Nature of charge to tax on employment income

      7        Meaning of “employment income”, “general earnings” and “specific

employment income”

      8        Meaning of “exempt income”

Chapter 3

Operation of tax charge

      9        Amount of employment income charged to tax

      10        Meaning of “taxable earnings” and “taxable specific income”

      11        Calculation of “net taxable earnings”

      12        Calculation of “net taxable specific income”

      13        Person liable for tax

 
HL Bill 3353/2
 
 

Income Tax (Earnings and Pensions) Bill

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Chapter 4

Taxable earnings: rules applying to employee resident, ordinarily resident and

domiciled in UK

Taxable earnings

      14        Taxable earnings under this Chapter: introduction

Employees resident, ordinarily resident and domiciled in UK

      15        Earnings for year when employee resident, ordinarily resident and domiciled

in UK

Year for which general earnings are earned

      16        Meaning of earnings “for” a tax year

      17        Treatment of earnings for year in which employment not held

When general earnings are received

      18        Receipt of money earnings

      19        Receipt of non-money earnings

Chapter 5

Taxable earnings: rules applying to employee resident, ordinarily resident or

domiciled outside UK

Taxable earnings

      20        Taxable earnings under this Chapter: introduction

Employees resident and ordinarily resident in UK

      21        Earnings for year when employee resident and ordinarily resident, but not

domiciled, in UK, except chargeable overseas earnings

      22        Chargeable overseas earnings for year when employee resident and

ordinarily resident, but not domiciled, in UK

      23        Calculation of “chargeable overseas earnings”

      24        Limit on chargeable overseas earnings where duties of associated

employment performed in UK

Employees resident but not ordinarily resident in UK

      25        UK-based earnings for year when employee resident, but not ordinarily

resident, in UK

      26        Foreign earnings for year when employee resident, but not ordinarily

resident, in UK

Employees not resident in UK

      27        UK-based earnings for year when employee not resident in UK

 
 

Income Tax (Earnings and Pensions) Bill

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Special class of earnings for purposes of sections 25 to 27

      28        Meaning of “general earnings from overseas Crown employment subject to

UK tax”

Year for which general earnings are earned

      29        Meaning of earnings “for” a tax year

      30        Treatment of earnings for year in which employment not held

When general earnings are received or remitted

      31        Receipt of money earnings

      32        Receipt of non-money earnings

      33        Earnings remitted to the United Kingdom

      34        Earnings remitted to the United Kingdom: further provisions about UK-

linked debts

Relief for delayed remittances

      35        Relief for delayed remittances

      36        Election in respect of delayed remittances

      37        Claims for relief on delayed remittances

Place of performance of duties of employment

      38        Earnings for period of absence from employment

      39        Duties in UK merely incidental to duties outside UK

      40        Duties on board vessel or aircraft

      41        Employment in UK sector of continental shelf

Chapter 6

Disputes as to domicile or ordinary residence

      42        Board to determine dispute as to domicile or ordinary residence

      43        Appeal against Board’s decision on domicile or ordinary residence

Chapter 7

Application of provisions to agency workers

Agency workers

      44        Treatment of workers supplied by agencies

      45        Arrangements with agencies

      46        Cases involving unincorporated bodies etc.

Supplementary

      47        Interpretation of this Chapter

 
 

Income Tax (Earnings and Pensions) Bill

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Chapter 8

Application of provisions to workers under arrangements made by

intermediaries

Application of this Chapter

      48        Scope of this Chapter

      49        Engagements to which this Chapter applies

      50        Worker treated as receiving earnings from employment

      51        Conditions of liability where intermediary is a company

      52        Conditions of liability where intermediary is a partnership

      53        Conditions of liability where intermediary is an individual

The deemed employment payment

      54        Calculation of deemed employment payment

      55        Application of rules relating to earnings from employment

      56        Application of Income Tax Acts in relation to deemed employment

Supplementary provisions

      57        Earlier date of deemed employment payment in certain cases

      58        Relief in case of distributions by intermediary

      59        Provisions applicable to multiple intermediaries

      60        Meaning of “associate”

      61        Interpretation

Part 3

Employment income: earnings and benefits etc. treated as earnings

Chapter 1

Earnings

      62        Earnings

Chapter 2

Taxable benefits: the benefits code

The benefits code

      63        The benefits code

      64        Relationship between earnings and benefits code

      65        Dispensations relating to benefits within provisions not applicable to lower-

paid employment

General definitions for benefits code

      66        Meaning of “employment” and related expressions

      67        Meaning of “director” and “full-time working director”

      68        Meaning of “material interest” in a company

 
 

Income Tax (Earnings and Pensions) Bill

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      69        Extended meaning of “control”

Chapter 3

Taxable benefits: expenses payments

      70        Sums in respect of expenses

      71        Meaning of paid or put at disposal by reason of the employment

      72        Sums in respect of expenses treated as earnings

Chapter 4

Taxable benefits: vouchers and credit-tokens

Cash vouchers: introduction

      73        Cash vouchers to which this Chapter applies

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

Meaning of "cash voucher"

      75        Meaning of “cash voucher”

      76        Sickness benefits-related voucher

      77        Apportionment of cost of provision of voucher

Cash vouchers: exceptions

      78        Voucher made available to public generally

      79        Voucher issued under approved scheme

      80        Vouchers where payment of sums exempt from tax

Benefit of cash voucher treated as earnings

      81        Benefit of cash voucher treated as earnings

Non-cash vouchers: introduction

      82        Non-cash vouchers to which this Chapter applies

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

Meaning of "non-cash voucher"

      84        Meaning of “non-cash voucher”

Non-cash voucher: exceptions

      85        Non-cash voucher made available to public generally

      86        Transport vouchers under pre-26th March 1982 arrangements

Benefit of non-cash voucher treated as earnings

      87        Benefit of non-cash voucher treated as earnings

      88        Year in which earnings treated as received

      89        Reduction for meal vouchers

 
 

Income Tax (Earnings and Pensions) Bill

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Credit-tokens: introduction

      90        Credit-tokens to which this Chapter applies

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

Meaning of "credit-token"

      92        Meaning of “credit-token”

Credit-tokens: exception

      93        Credit-token made available to public generally

Benefit of credit-token treated as earnings

      94        Benefit of credit-token treated as earnings

General supplementary provisions

      95        Disregard for money, goods or services obtained

      96        Dispensations relating to vouchers or credit-tokens

Chapter 5

Taxable benefits: living accommodation

Living accommodation

      97        Living accommodation to which this Chapter applies

Exceptions

      98        Accommodation provided by local authority

      99        Accommodation provided for performance of duties

      100        Accommodation provided as result of security threat

      101        Chevening House

Benefit of living accommodation treated as earnings

      102        Benefit of living accommodation treated as earnings

Calculation of cash equivalent

      103        Method of calculating cash equivalent

      104        General rule for calculating cost of providing accommodation

Accommodation costing £75,000 or less

      105        Cash equivalent: cost of accommodation not over £75,000

Accommodation costing more than £75,000

      106        Cash equivalent: cost of accommodation over £75,000

      107        Special rule for calculating cost of providing accommodation

 
 

 
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Revised 17 February 2003