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Income Tax (Earnings and Pensions) Act 2003

2003 CHAPTER 1

CONTENTS

Go to Preamble

  1. Part 1

    Overview

    1. 1. Overview of contents of this Act

    2. 2. Abbreviations and general index in Schedule 1

  2. Part 2

    Employment income: charge to tax

    1. Chapter 1

      Introduction

      1. 3. Structure of employment income Parts

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

      3. 5. Application to offices and office-holders

    2. Chapter 2

      Tax on employment income

      1. 6. Nature of charge to tax on employment income

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

      3. 8. Meaning of “exempt income”

    3. Chapter 3

      Operation of tax charge

      1. 9. Amount of employment income charged to tax

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

      3. 11. Calculation of “net taxable earnings”

      4. 12. Calculation of “net taxable specific income”

      5. 13. Person liable for tax

    4. Chapter 4

      Taxable earnings: rules applying to employee resident, ordinarily resident and domiciled in UK

      1. Taxable earnings

        1. 14. Taxable earnings under this Chapter: introduction

      2. Employees resident, ordinarily resident and domiciled in UK

        1. 15. Earnings for year when employee resident, ordinarily resident and domiciled in UK

      3. Year for which general earnings are earned

        1. 16. Meaning of earnings “for” a tax year

        2. 17. Treatment of earnings for year in which employment not held

      4. When general earnings are received

        1. 18. Receipt of money earnings

        2. 19. Receipt of non-money earnings

    5. Chapter 5

      Taxable earnings: rules applying to employee resident, ordinarily resident or domiciled outside UK

      1. Taxable earnings

        1. 20. Taxable earnings under this Chapter: introduction

      2. Employees resident and ordinarily resident in UK

        1. 21. Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings

        2. 22. Chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK

        3. 23. Calculation of “chargeable overseas earnings”

        4. 24. Limit on chargeable overseas earnings where duties of associated employment performed in UK

      3. Employees resident but not ordinarily resident in UK

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

        2. 26. Foreign earnings for year when employee resident, but not ordinarily resident, in UK

      4. Employees not resident in UK

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

      5. Special class of earnings for purposes of sections 25 to 27

        1. 28. Meaning of “general earnings from overseas Crown employment subject to UK tax”

      6. Year for which general earnings are earned

        1. 29. Meaning of earnings “for” a tax year

        2. 30. Treatment of earnings for year in which employment not held

      7. When general earnings are received or remitted

        1. 31. Receipt of money earnings

        2. 32. Receipt of non-money earnings

        3. 33. Earnings remitted to UK

        4. 34. Earnings remitted to UK: further provisions about UK-linked debts

      8. Relief for delayed remittances

        1. 35. Relief for delayed remittances

        2. 36. Election in respect of delayed remittances

        3. 37. Claims for relief on delayed remittances

      9. Place of performance of duties of employment

        1. 38. Earnings for period of absence from employment

        2. 39. Duties in UK merely incidental to duties outside UK

        3. 40. Duties on board vessel or aircraft

        4. 41. Employment in UK sector of continental shelf

    6. Chapter 6

      Disputes as to domicile or ordinary residence

      1. 42. Board to determine dispute as to domicile or ordinary residence

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

    7. Chapter 7

      Application of provisions to agency workers

      1. Agency workers

        1. 44. Treatment of workers supplied by agencies

        2. 45. Arrangements with agencies

        3. 46. Cases involving unincorporated bodies etc.

      2. Supplementary

        1. 47. Interpretation of this Chapter

    8. Chapter 8

      Application of provisions to workers under arrangements made by intermediaries

      1. Application of this Chapter

        1. 48. Scope of this Chapter

        2. 49. Engagements to which this Chapter applies

        3. 50. Worker treated as receiving earnings from employment

        4. 51. Conditions of liability where intermediary is a company

        5. 52. Conditions of liability where intermediary is a partnership

        6. 53. Conditions of liability where intermediary is an individual

      2. The deemed employment payment

        1. 54. Calculation of deemed employment payment

        2. 55. Application of rules relating to earnings from employment

        3. 56. Application of Income Tax Acts in relation to deemed employment

      3. Supplementary provisions

        1. 57. Earlier date of deemed employment payment in certain cases

        2. 58. Relief in case of distributions by intermediary

        3. 59. Provisions applicable to multiple intermediaries

        4. 60. Meaning of “associate”

        5. 61. Interpretation

  3. Part 3

    Employment income: earnings and benefits etc. treated as earnings

    1. Chapter 1

      Earnings

      1. 62. Earnings

    2. Chapter 2

      Taxable benefits: the benefits code

      1. The benefits code

        1. 63. The benefits code

        2. 64. Relationship between earnings and benefits code

        3. 65. Dispensations relating to benefits within provisions not applicable to lower-paid employment

      2. General definitions for benefits code

        1. 66. Meaning of “employment” and related expressions

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

        3. 68. Meaning of “material interest” in a company

        4. 69. Extended meaning of “control”

    3. Chapter 3

      Taxable benefits: expenses payments

      1. 70. Sums in respect of expenses

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

      3. 72. Sums in respect of expenses treated as earnings

    4. Chapter 4

      Taxable benefits: vouchers and credit-tokens

      1. Cash vouchers: introduction

        1. 73. Cash vouchers to which this Chapter applies

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

      2. Meaning of “cash voucher”

        1. 75. Meaning of “cash voucher”

        2. 76. Sickness benefits-related voucher

        3. 77. Apportionment of cost of provision of voucher

      3. Cash vouchers: exceptions

        1. 78. Voucher made available to public generally

        2. 79. Voucher issued under approved scheme

        3. 80. Vouchers where payment of sums exempt from tax

      4. Benefit of cash voucher treated as earnings

        1. 81. Benefit of cash voucher treated as earnings

      5. Non-cash vouchers: introduction

        1. 82. Non-cash vouchers to which this Chapter applies

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

      6. Meaning of “non-cash voucher”

        1. 84. Meaning of “non-cash voucher”

      7. Non-cash voucher: exceptions

        1. 85. Non-cash voucher made available to public generally

        2. 86. Transport vouchers under pre-26th March 1982 arrangements

      8. Benefit of non-cash voucher treated as earnings

        1. 87. Benefit of non-cash voucher treated as earnings

        2. 88. Year in which earnings treated as received

        3. 89. Reduction for meal vouchers

      9. Credit-tokens: introduction

        1. 90. Credit-tokens to which this Chapter applies

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

      10. Meaning of “credit-token”

        1. 92. Meaning of “credit-token”

      11. Credit-tokens: exception

        1. 93. Credit-token made available to public generally

      12. Benefit of credit-token treated as earnings

        1. 94. Benefit of credit-token treated as earnings

      13. General supplementary provisions

        1. 95. Disregard for money, goods or services obtained

        2. 96. Dispensations relating to vouchers or credit-tokens

    5. Chapter 5

      Taxable benefits: living accommodation

      1. Living accommodation

        1. 97. Living accommodation to which this Chapter applies

      2. Exceptions

        1. 98. Accommodation provided by local authority

        2. 99. Accommodation provided for performance of duties

        3. 100. Accommodation provided as result of security threat

        4. 101. Chevening House

      3. Benefit of living accommodation treated as earnings

        1. 102. Benefit of living accommodation treated as earnings

      4. Calculation of cash equivalent

        1. 103. Method of calculating cash equivalent

        2. 104. General rule for calculating cost of providing accommodation

      5. Accommodation costing £75,000 or less

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

      6. Accommodation costing more than £75,000

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

        2. 107. Special rule for calculating cost of providing accommodation

      7. Apportionment of cash equivalent

        1. 108. Cash equivalent: accommodation provided for more than one employee

      8. Other tax implications

        1. 109. Priority of this Chapter over Chapter 1 of this Part

      9. Supplementary

        1. 110. Meaning of “annual value”

        2. 111. Disputes as to annual value

        3. 112. Meaning of “person involved in providing the accommodation”

        4. 113. Meaning of “the property”

    6. Chapter 6

      Taxable benefits: cars, vans and related benefits

      1. General

        1. 114. Cars, vans and related benefits

        2. 115. Meaning of “car” and “van”

        3. 116. Meaning of when car or van is available to employee

        4. 117. Meaning of car or van made available by reason of employment

        5. 118. Availability for private use

        6. 119. Where alternative to benefit of car offered

      2. Cars: benefit treated as earnings

        1. 120. Benefit of car treated as earnings

        2. 121. Method of calculating the cash equivalent of the benefit of a car

      3. Cars: the price of a car

        1. 122. The price of the car

        2. 123. The list price of a car

        3. 124. The notional price of a car with no list price

      4. Cars: treatment of accessories

        1. 125. Meaning of “accessory” and related terms

        2. 126. Amounts taken into account in respect of accessories

        3. 127. The list price of an accessory

        4. 128. Accessory: published price of the car manufacturer etc.

        5. 129. Accessory: published price of the accessory manufacturer etc.

        6. 130. The notional price of an accessory

        7. 131. Replacement accessories

      5. Cars: capital contributions by employee

        1. 132. Capital contributions by employee

      6. Cars: the appropriate percentage

        1. 133. How to determine the “appropriate percentage”

        2. 134. Meaning of car with or without a CO2 emissions figure

      7. Cars: appropriate percentage: first registered on or after 1st January 1998

        1. 135. Car with a CO2 emissions figure: pre-October 1999 registration

        2. 136. Car with a CO2 emissions figure: post-September 1999 registration

        3. 137. Car with a CO2 emissions figure: bi-fuel cars

        4. 138. Car with a CO2 emissions figure: automatic car for a disabled employee

        5. 139. Car with a CO2 emissions figure: the appropriate percentage

        6. 140. Car without a CO2 emissions figure: the appropriate percentage

        7. 141. Diesel cars: the appropriate percentage

      8. Cars: appropriate percentage: first registered before 1st January 1998

        1. 142. Car first registered before 1st January 1998: the appropriate percentage

      9. Cars: unavailability or payments for private use

        1. 143. Deduction for periods when car unavailable

        2. 144. Deduction for payments for private use

        3. 145. Modification of provisions where car temporarily replaced

      10. Cars: special cases

        1. 146. Cars that run on road fuel gas

        2. 147. Classic cars: 15 years of age or more

      11. Cars: reduction where shared car

        1. 148. Reduction of cash equivalent where car is shared

      12. Car fuel: benefit treated as earnings

        1. 149. Benefit of car fuel treated as earnings

        2. 150. Car fuel: calculating the cash equivalent

        3. 151. Car fuel: nil cash equivalent

        4. 152. Car fuel: proportionate reduction of cash equivalent

        5. 153. Car fuel: reduction of cash equivalent

      13. Vans: benefit treated as earnings

        1. 154. Benefit of van treated as earnings

        2. 155. Method of calculating the cash equivalent of the benefit of a van

        3. 156. Meaning of “shared van”

      14. Vans: value of exclusive availability

        1. 157. Value of exclusive availability

        2. 158. Deduction for periods of unavailability or shared use

        3. 159. Deduction for payments for private use

      15. Vans: value of shared availability

        1. 160. Value of shared availability

        2. 161. Value of shared availability: normal calculation

        3. 162. Shared van: meaning of “participating employee”

        4. 163. Shared van: basic value

        5. 164. Value of shared availability: alternative calculation

        6. 165. Deduction for payments for private use

      16. Vans: limit of cash equivalent

        1. 166. Vans: limit of cash equivalent

      17. Cars and vans: exceptions

        1. 167. Pooled cars

        2. 168. Pooled vans

        3. 169. Car available to more than one member of family or household employed by same employer

      18. Orders

        1. 170. Orders etc. relating to this Chapter

      19. Supplementary

        1. 171. Minor definitions: general

        2. 172. Minor definitions: equipment to enable a disabled person to use a car

    7. Chapter 7

      Taxable benefits: loans

      1. Introduction

        1. 173. Loans to which this Chapter applies

        2. 174. Employment-related loans

      2. Benefit of taxable cheap loan treated as earnings

        1. 175. Benefit of taxable cheap loan treated as earnings

        2. 176. Exception for loans on ordinary commercial terms

        3. 177. Exceptions for loans at fixed rate of interest

        4. 178. Exception for loans where interest qualifies for tax relief

        5. 179. Exception for certain advances for necessary expenses

        6. 180. Threshold for benefit of loan to be treated as earnings

      3. Calculation of amount of interest at official rate

        1. 181. The official rate of interest

        2. 182. Normal method of calculation: averaging

        3. 183. Alternative method of calculation

      4. Supplementary provisions relating to taxable cheap loans

        1. 184. Interest treated as paid

        2. 185. Apportionment of cash equivalent in case of joint loan etc.

        3. 186. Replacement loans

        4. 187. Aggregation of loans by close company to director

      5. Loan released or written off

        1. 188. Loan released or written off: amount treated as earnings

        2. 189. Exception where double charge

      6. General supplementary provisions

        1. 190. Exclusion of charge after death of employee

        2. 191. Claim for relief to take account of event after assessment

    8. Chapter 8

      Taxable benefits: notional loans in respect of acquisitions of shares

      1. Introduction

        1. 192. Application of this Chapter

      2. Acquisition of shares for less than market value

        1. 193. Notional loan where acquisition for less than market value

        2. 194. The amount of the notional loan

        3. 195. Discharge of notional loan: amount treated as earnings

      3. Supplementary provisions

        1. 196. Effects on other income tax charges

        2. 197. Minor definitions

    9. Chapter 9

      Taxable benefits: disposals of shares for more than market value

      1. 198. Shares to which this Chapter applies

      2. 199. Disposal for more than market value: amount treated as earnings

      3. 200. Minor definitions

    10. Chapter 10

      Taxable benefits: residual liability to charge

      1. Introduction

        1. 201. Employment-related benefits

        2. 202. Excluded benefits

      2. Cash equivalent of benefit treated as earnings

        1. 203. Cash equivalent of benefit treated as earnings

      3. Determination of the cost of the benefit

        1. 204. Cost of the benefit: basic rule

        2. 205. Cost of the benefit: asset made available without transfer

        3. 206. Cost of the benefit: transfer of used or depreciated asset

      4. Supplementary provisions

        1. 207. Meaning of “annual rental value”

        2. 208. Meaning of “market value”

        3. 209. Meaning of “persons providing benefit”

        4. 210. Power to exempt minor benefits

      5. Special rules for scholarships

        1. 211. Special rules for scholarships: introduction

        2. 212. Scholarships provided under arrangements entered into by employer or connected person

        3. 213. Exception for certain scholarships under trusts or schemes

        4. 214. Scholarships: cost of the benefit

        5. 215. Limitation of exemption for scholarship income in section 331 of ICTA

    11. Chapter 11

      Taxable benefits: exclusion of lower-paid employments from parts of benefits code

      1. Introduction

        1. 216. Provisions not applicable to lower-paid employments

      2. What is lower-paid employment

        1. 217. Meaning of “lower-paid employment”

        2. 218. Calculation of earnings rate for a tax year

        3. 219. Extra amounts to be added in connection with a car

      3. Treatment of related employments

        1. 220. Related employments

    12. Chapter 12

      Payments treated as earnings

      1. 221. Payments where employee absent because of sickness or disability

      2. 222. Payments by employer on account of tax where deduction not possible

      3. 223. Payments on account of director’s tax other than by the director

      4. 224. Payments to non-approved personal pension arrangements

      5. 225. Payments for restrictive undertakings

      6. 226. Valuable consideration given for restrictive undertakings

  4. Part 4

    Employment income: exemptions

    1. Chapter 1

      Exemptions: general

      1. 227. Scope of Part 4

      2. 228. Effect of exemptions on liability under provisions outside Part 2

    2. Chapter 2

      Exemptions: mileage allowances and passenger payments

      1. Mileage allowances

        1. 229. Mileage allowance payments

        2. 230. The approved amount for mileage allowance payments

        3. 231. Mileage allowance relief

        4. 232. Giving effect to mileage allowance relief

      2. Passenger payments

        1. 233. Passenger payments

        2. 234. The approved amount for passenger payments

      3. Supplementary

        1. 235. Vehicles to which this Chapter applies

        2. 236. Interpretation of this Chapter

    3. Chapter 3

      Exemptions: other transport, travel and subsistence

      1. 237. Parking provision and expenses

      2. 238. Modest private use of heavy goods vehicles

      3. 239. Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles

      4. 240. Incidental overnight expenses and benefits

      5. 241. Incidental overnight expenses and benefits: overall exemption limit

      6. 242. Works transport services

      7. 243. Support for public bus services

      8. 244.