Finance Act 1993

108 Counselling services for employees.U.K.

In Chapter VI of Part XIII of the Taxes Act 1988, after section 589 there shall be inserted the following sections—

“589A Counselling services for employees.

(1)This section applies where—

(a)qualifying counselling services are provided to a person (the employee) in connection with the termination of the holding by him of any office or employment, and

(b)the termination takes place on or after 16th March 1993.

(2)This section also applies where—

(a)subsection (1)(a) above applies, and

(b)the termination takes place before 16th March 1993 but relevant expenditure is incurred on or after that date.

(3)Relevant expenditure is expenditure incurred in—

(a)providing the qualifying counselling services to the employee,

(b)paying or reimbursing fees for the provision to the employee of the qualifying counselling services, or

(c)paying or reimbursing any allowable travelling expenses incurred in connection with the provision of the qualifying counselling services to the employee.

(4)No charge to tax under Schedule E shall arise in respect of—

(a)the provision of the qualifying counselling services to the employee,

(b)the payment or reimbursement of fees for the provision to the employee of the qualifying counselling services, or

(c)the payment or reimbursement of any allowable travelling expenses incurred in connection with the provision of the qualifying counselling services to the employee.

(5)Where this section applies by virtue of subsection (2) above, subsection (4) above shall apply only to the extent that the expenditure incurred in providing the services or paying or reimbursing the fees or expenses is incurred on or after 16th March 1993.

(6)Subsection (4) above shall apply whether or not the person who provides the services or pays or reimburses the fees or expenses is the person under whom the employee holds or held the office or employment mentioned in subsection (1) above.

(7)Subsections (8) to (10) below apply where any relevant expenditure is incurred by the person under whom the employee holds or held the office or employment mentioned in subsection (1) above (the employer).

(8)If and so far as the expenditure would not, apart from this subsection, be so deductible, it shall be deductible in computing for the purposes of Schedule D the profits or gains of the trade, profession or vocation of the employer for the purposes of which the employee is or was employed.

(9)If the employer carries on a business and the expenses of management of the business are eligible for relief under section 75, subsection (8) above shall have effect as if for the words from “in computing” onwards there were substituted “as expenses of management for the purposes of section 75”.

(10)Where this section applies by virtue of subsection (2) above, subsections (8) and (9) above shall apply only to the extent that the expenditure is incurred on or after 16th March 1993.

589B Qualifying counselling services etc.

(1)Subsections (2) to (4) below apply for the purposes of section 589A.

(2)Subject to subsection (3) below, services are qualifying counselling services if—

(a)the purpose, or main purpose, of their provision is to enable the employee to adjust to the termination of his holding of the office or employment mentioned in section 589A(1) or is to enable him to find other gainful employment (including self-employment) or is to enable him to do both,

(b)the services consist wholly of any or all of the following, namely, giving advice and guidance, imparting or improving skills, and providing or making available the use of office equipment or similar facilities,

(c)the employee has been employed by the employer full-time throughout the period of two years ending at the time when the services begin to be provided to him or, if it is earlier, at the time he ceases to be employed by the employer,

(d)the opportunity to receive the services, on similar terms as to payment or reimbursement of any expenses incurred in connection with their provision, is available either generally to holders or past holders of offices or employment under the employer or to a particular class or classes of such holders or past holders, and

(e)the services are provided in the United Kingdom.

(3)Where paragraphs (a) to (d) of subsection (2) above are satisfied in relation to particular services but the services are provided partly in and partly outside the United Kingdom, the extent to which the services are qualifying counselling services shall be determined on a just and reasonable basis.

(4)In relation to services, allowable travelling expenses are those which would be deductible under section 198—

(a)on the assumption that receipt of the services is one of the duties of the employee’s office or employment, and

(b)if the employee has in fact ceased to be employed by the employer, on the assumption that he continues to be employed by him.

(5)Any reference in this section or section 589A to an employee being employed by an employer is a reference to the employee holding office or employment under the employer.”